A personal budget template is an unavoidable component in the arsenal of anyone trying to achieve a financial goal.
A budget restricts one from making unnecessary purchases. Also, it makes sure that they keep aside a certain amount of money for other essential purposes like investments or an emergency fund.
Controlling expenses is more manageable when people know that they only have a limited amount of money to spend for a specific period.
This article discusses the importance of personal budgeting. It also introduces readers to an easy-to-use personal budget template that they can download and use on their device of choice.
Importance Of Personal Budgeting
It Helps Control Spending
Without an accurate idea of how much money can be spent, it is easy to lose track of spending habits—for example, paying rupees two hundred on a sandwich may not seem much. But what if someone treats themselves to 20 of them every month?
Not so little of an expense now, is it? If a person keeps track of their expenses and compares it to their budget, they are more likely to notice the pattern and stop themselves from spending lavishly.
It Keeps Track Of Financial Goals
Budgeting is essential because it helps people stay on track towards their financial goals. Setting financial goals is easy.
The tricky part is achieving them. To achieve financial goals, it is essential to stick to a plan and stay focused – a budget combined with expense tracking is a way to do this. Once a budget is set, all that needs to be done is a reverse engineer with accurate expense tracking.
It Helps Save More
The ability to save more is one of the most apparent benefits of budgeting. Between someone living on a budget and someone who is not, the former will be saving a more significant portion of their income.
It Helps Find Financial Contentment
Financial contentment is one of the essential elements of sound financial behaviour. It prevents people from spending borrowed money. From a contentment perspective, it is also mentally unhealthy to focus on someone else’s finances rather than one’s own.
When someone creates a budget for their small business or personal use, assesses it, and alters it, they are making a conscious effort to focus only on their finances. Once this becomes a habit, financial content is not that far away.
It Keeps Financial Stress Away
A lot of the stress people face could be related to finance. Maybe they are not able to pay the credit card bill, or they do not have enough money for emergencies.
The good thing is that such situations can be avoided with budget and expense tracking. Doing so ensures that people are not spending more than they should be and that they are prepared for unexpected events.
It Helps Become Debt-Free
Building wealth is very important for people to not spend money on things they cannot afford. It is not an ideal situation when a substantial portion of someone’s monthly income goes towards paying off debt.
Sticking to a budget means that people can save more and use it to pay off debt. Once that is done, it allows people to save up for big purchases so that they won’t have to take on any more debt.
It Keeps People Financially Organized
The longer someone goes without a budget or expense tracking, the more the chances of their financial situation getting messed up. It won’t be long before such people end up in a financial crunch and all stressed out.
Prepare For Emergencies
It is impossible to predict the events of the future. Anything could happen. What if the car breaks down suddenly? What if there is a medical emergency?
Running around trying to arrange money is not a pleasant experience. This will not happen If there is a provision in the personal budget for emergencies.
How To Use The Personal Budget Template
Anyone with a basic knowledge of operating a smartphone or a tablet or a computer can use a personal budget template. Let’s take the case of the personal budget template from Lio.
Once the app is installed, from the home screen, go to Personal and then choose Monthly Budget Register. Below is a screenshot of the template.
Before using this template, it is imperative to set a personal budget. For example, set aside INR 15,000 for everything, including groceries, entertainment, fuel, etc. Once that’s done, it is just a matter of tracking expenses and making sure it doesn’t go over the budget before the period ends.
Here are the steps one should take while using the template.
Step 1: In the Item column, enter the name or description of the expense.
Step 2: Enter the value of the expense in the Amount column. The total of all expenses for the period will be automatically calculated and shown at the end of this column.
Step 3: In the Notes template, enter any extra information or notes related to the expense.
The template itself can be customized to the user’s liking by adding new columns. Simply click on the + on the top right of the template.
Not downloaded the Lio App yet? Here is how you can start with Lio App.
Step 1: Select the Language you want to work on. Lio for Android
Step 2: Create your account using your Phone Number or Email Id.
Verify the OTP and you are good to go.
Step 3: Select a template in which you want to add your data.
Add your Data with our Free Cloud Storage.
Step 4: All Done? Share and Collaborate with your contacts.
Budgeting and expense tracking could very well make the difference between being broke and living a financially stress-free life.
In the long run, it will lead to more net worth compared to others who did not control their expenses with a budget.
I hope this article has helped you in understanding the personal budget template.
What a fantastic post! This is so chock full of useful information. I can’t wait to dig deep and start using your personal budget template.
Thank you for the generous words.
I am pleased that you found this article interesting!
Do explore the budget templates along with the empty template, which you can customize according to your requirements! Also, you can share your experience with us!
Should I track all my expenses on a daily basis? Will it improve my money management skills?
When you track your spending, you know where your money goes and you can ensure that your money is used wisely.
Tracking your expenditures also allows you to understand why you’re in debt and how you got there. This will then help you design a befitting strategy of getting out of debt.
Monitoring your expenses throughout the month holds you accountable for your finances in a few key ways. It helps you stick to your budget, reveals spending issues, also helps to meet your financial objectives and as a result, will aid in improving one’s money management skills.
What does the budget rule of 50/20/30 mean? I’ve been reading and hearing about this rule a lot lately.
In actuality, the rule is quite straightforward. It instructs you to divide your cash on hand into three portions. 50% of the income is spent on needs, 30% on wants, and 20% is set aside for savings and investments. You will be operating inside the allowed amount for each bucket if you have established buckets for everything.