Hate to Budget? Here's a Free Worksheet to Help You Manage Your Lifestyle

Keeping a family budget is a pain. Tracking every transaction, categorizing them and then figuring out why your spending doesn't "fit" the plan is not what most of us like to do in our free time.  Even with bank downloads to programs like Quicken, it takes time to categorize and reconcile. Who wants to be a part-time bookkeeper?? The idea of budgeting is valid. It is foundational for creating wealth. It can help you capture excess income for savings, investment or to pay off debt. I have clients that enjoy it and create amazing spreadsheets that give them great insight into managing their lifestyle.

Most client don’t keep clear budgets though and neither do I. “WHAT?” you say. “How can YOU not keep a budget? Your a Financial Planner for heavens sake!”.  Over the years I’ve tried but trying to keep up with it month after month didn’t seem productive for the time spent.

Instead I created a simple method that allows you to manage your spending, capture excess income and give you more free time. I call that a win win win! I've dubbed it the Cash Flow Bucket method.

The advantages of the Cash Flow Bucket method:

1. You don’t waste time tracking every transaction.

2. You have less stress deciding how to spend money each month.

3. You don’t spend money just because it’s there.

4. You easily capture (save) excess income as savings.

5. You can make smarter decisions on allocating savings.

6. You maintain flexibility for unexpected expenses.

How to Do Yours

Here are four simple steps to establish your lifestyle budget and capture excess earnings.

Step 1: Determine Your Monthly Lifestyle Budget

• Print or download your last three monthly bank statements.

• Click and print this free worksheet

• Use table A (on the worksheet) to list your fixed monthly expenses.

• Use table B (on the worksheet) to list all other monthly expenses. Don't create a lot of categories; focus on finding an estimated monthly variable expense total.

• Determine your monthly lifestyle budget. This should be a set monthly amount you are committed to staying under.

Step 2: Set Up an Income Account

• Set up a separate checking or savings account to receive all income.

• Deposit any and all in-flows (paycheck, etc.) into this account.

Step 3: Establish a Monthly Transfer

• At the beginning of each month transfer your monthly lifestyle budget to your spending account.

• Spend this money each month. Don’t worry about tracking each expense or category. Towards the end of each month this account should be nearly depleted.

• If you start to run short near the end of each month, have a short meeting to understand why and consciously decide to move addition funds to your spending account from your income account.

Step 4: Adjust and Decide

• Every three months review how well you did staying within your lifestyle budget. If you consistently had to transfer addition funds, determine why and work on spending habits or redo step one.

• Assuming you’ve had excess cash built up in your income account, review your net worth statement and determine where it should be deployed: spending, debt reduction, savings, investing and/or giving.

 QUESTION: If you hate to budget, how do you manage your monthly spending to assure you are saving for the future?

Answer below or Tweet to @roger_whitney