A Financial Checklist for Creating Your Budget
Feeling ready to start? Here is a simple checklist to guide you through the process of creating and maintaining your retirement budget spreadsheet.
First, choose your preferred tool. Decide whether you want to use a digital spreadsheet like Google Sheets or a physical notebook. The best tool is the one you will consistently use.
Second, gather all your financial documents. Collect at least two months’ worth of bank statements, credit card bills, utility bills, and any statements from your income sources like Social Security or a pension.
Third, build the framework of your spreadsheet. Create your sections for Income, Fixed Expenses, and Variable Expenses. Set up your columns for “Category,” “Budgeted,” “Actual,” and “Difference.”
Fourth, fill in your budgeted amounts. Go through your documents and list all your income sources and expenses, assigning a realistic planned amount to each one.
Fifth, track your actual spending throughout the month. Keep receipts or check your online banking regularly to see how your actual spending compares to your budget.
Sixth, review and analyze at the end of the month. Calculate your net cash flow. Identify where you were successful and where you overspent. This is your chance to learn and improve.
Finally, make adjustments for the next month. Use the information you learned to create a more accurate and effective budget for the upcoming month. Remember, budgeting is a continuous cycle of planning, tracking, and adjusting.
