The Benefits Of Using A Budget Template For Your Finances
The Benefits Of Using A Budget Template For Your Finances
8 May 2023
We know that budgets aren’t always the most exciting thing to talk about, but if you’re trying to break the cycle of living paycheck to paycheck, get out of debt or start saving, then sticking to a budget may help you manage your cash flow and reach your goals faster.
You don’t have to create a budget from scratch as there are many tools to support you in the process. Whether it’s budget calculators, budget apps, or budget spreadsheet templates you can easily find a solution to make it simpler for you to create a spending plan that works for you.
What is the Importance of Budgeting to Your Financial Plan?
A financial plan is essentially a plan created towards achieving your short, medium and long-term financial goals, such as paying off debt, saving for travel, a new car, or buying a home.
Once you’ve set your goals, budget planning helps you create a tracking system to understand where your money is going and identify areas where you can be more intentional or cut back on spending to allocate more towards these goals. In other words, a budget can help put that plan into action and turn your goals into reality!
What is a Budget Template?
A budget plan aka budget template is a pre-made spreadsheet or document that helps you track your expenses and plan for future spending. It typically includes categories for different types of expenses, such as housing, utilities, food, transport, and spending or entertainment.
It is an easy way to monitor your finances to see if you’re on track with your spending. Rather than having to create an entire budget yourself, a budget template provides an outline for you to fill in the blanks with your spending amounts.
Benefits of Using a Budget Template
- Providing a Clearer Picture of Finances and Net Worth: Using a budget template requires you to track your personal or household budget, income and expenses, which can help you gain a better understanding of your financial situation. This increased awareness can help you make better financial decisions and avoid overspending.
- Provides insight into your spending habits: it forces you to pay attention to and take a close look at your spending habits. When reviewing your expenses, you may notice that you’re spending money on things you don’t need, such as subscriptions and other expenses. Budgeting allows you to rethink your spending habits and refocus on your financial goals.
- Helping to Prioritise Spending and Saving: A budget can help you to break things down into needs, wants and likes, or bills and discretionary spending. You can identify areas where you can cut back on spending and increase savings and set spending limits and allocate funds towards savings or debt payments. By knowing exactly how much money you have available and where it's going, you can better manage your money and avoid unnecessary expenses.
- Reducing Stress and Anxiety. Financial stress is a common issue for many people, which is often directly related to how out of control someone feels. A budget template can help you to take back control and reduce this stress.
- Paying bills on time, and improving your credit score. Using a budget tracker can help you to keep on top of your commitments and pay bills on time, you can maintain a healthy credit score.
- Helps you to make better decisions. A budget template can help you make better financial decisions by giving you a clear picture of your income and expenses. By having this information readily available, you can make informed decisions about spending and saving, and avoid making impulsive or unnecessary purchases.
How to Choose a Budget Template
When choosing a budget template, consider your personal preferences and needs. Some templates are more detailed than others, and some may include sections that aren't relevant to your situation. Look for a template that is easy to use and understand, and that includes categories for all of your expenses.
When it comes to choosing a budget template, there are several factors to consider to ensure that you select the best option for your needs. Here are a few things to keep in mind when choosing a budget template:
- Format: Budget templates come in a variety of formats, including spreadsheets, apps, and printable PDFs. Choose a format that works for you.
- Features: Different budget templates offer different features, so consider what you need from a budget template. For example, some templates may include a debt tracker or savings goals and savings tracker sections, while others may not.
- Customisation: Some budget templates are highly customisable, allowing you to tailor them to your specific situation. Others may not allow for as much customisation. Consider how important customisation is to you.
- Ease of Use: You want a budget template that is easy to use and understand. Look for templates that are user-friendly and intuitive, so you can quickly and easily enter your income and expenses.
- Compatibility: If you plan to use a budgeting app or software, make sure the template you choose is compatible with the app or software you plan to use. Some apps have their own inbuilt templates.
- Cost: Some budget templates are free, while others may require a subscription or purchase. Consider whether you’re willing to pay for a budget template or you'd prefer a free option.
Ultimately, the best budget template for you will depend on your individual needs and preferences. Take the time to explore different options and consider the factors above to choose a budget template that works best for you.
Tips for Using a Budget Template
Using a budget worksheet or budget template can be an effective way to manage your finances, but it's important to use it effectively to get the most out of it. Here are some tips to help you use a budget template well:
- Track Your Spending Accurately: This means entering all of your income and expenses into the templates. Be sure to check your spending on all your debit and credit cards to include even the small expenses. The more accurate your tracking is, the better your budget template will work for you.
- Be realistic: One rule of thumb is to underestimate your income and overestimate your expenses. Looking at your expenses accurately and being honest about what you are spending is important to creating a workable budget.
- Choose a time frame that works for you: Whether it’s a weekly budget, monthly budget or yearly budget, choose the appropriate time frame to support how you best like to work with and plan your finances. If you’re more motivated short-term, then it can be easier to focus on your weekly and monthly spending habits, than the whole year.
- Don’t: using a budget template can seem daunting - if you haven’t created a budget plan before, seeing your income and expenses realistically displayed in a spreadsheet can be quite a shock. Rather than judge how you spend your money, or your spending habits, shift your focus to using it as a tool to help guide future healthy spending habits and better financial behaviours.
- Set Realistic Goals: Setting realistic spending limits and savings goals is important to the success of your budgeting efforts. Use your budget template to set realistic goals for saving money, paying off debt, and reducing expenses. Avoid pushing too hard so you'll be more motivated to stick to your budget.
- Use a savings tracker: Whilst it’s important to track your expenses, it’s also important to track your savings. If you have money going to savings accounts on a weekly or monthly basis, keeping track of your savings is a good way to motivate yourself and monitor your progress towards your savings goals.
- Review Your Budget Regularly: Regular review will help you to stay on track. Your spending habits change often so it’s important to set aside time each week or month to review your budget and make any necessary adjustments to account for the changes in your life and spending habits.
- Be Flexible: Your budget template is a guide, not a set of strict rules. Be flexible and willing to adjust your budget as your circumstances change. Life happens, and unexpected expenses can arise, so be prepared to make changes as needed.
- Use Technology to Your Advantage: Use budgeting apps or software to help you track your spending and stay on track with your budget overview.
Remember, budgeting is a process, and it takes time and effort to get it right. Be patient and stay committed, and you'll see the results over time.
This article contains general information only and does not take into account your personal circumstances, financial situation or needs. Before making a financial decision, you should read the relevant Product Disclosure Statement and Target Market Determination of the specific financial product and consider whether the product is right for you and whether you should obtain advice from a financial adviser.