The single best tool that helped me get out of debt was my Google budget template: the budget toolkit. If you are serious about becoming debt free, you must track your income and expenses. When I started to track my spending for the very first time in 2011, I suddenly felt in control of my finances.
I have been using the same spreadsheet since 2011 with a few modifications to the aesthetics. Everything else has stayed the same. I haven’t switched over to a fancy app or new platform. I have simply used Google Sheets because I like accessing my spreadsheet on the go.
I frequently have my Google budget template up on my desktop throughout the week if I need to peep at it quickly. So, if you haven’t done so already, download the budget toolkit then pop right back over to this tutorial post so you can walk through how to set this bad boy up!
This is a video tutorial on how to get your budget spreadsheet setup in Google sheets correctly.
Download the budget toolkit
The obvious first step. Download the budget toolkit directly from my website. You will need to confirm your email (so I know you are a real potential debt free millennial) and then you will be taken directly to Google Drive.
One thing to note, you will need to make a copy of the budget toolkit in order to edit it. I have had many people request access or permission to edit, but you don’t need to do that.
All you need to do is open the toolkit, hit File > Make a copy > and then save under a different name and under your own Google Drive account. Alternatively, you can save this as an Excel file to your desktop, but I much prefer working within Google Drive because I can access the file from anywhere regardless of what computer I’m using!
Google budget template: Yearly glance tab
After the READ ME tab, you will see a yearly glance tab. The yearly glance tab helps you see all of your spending in an annual basis. A lot of people don’t take advantage of this. I think it can really help you put your finances in perspective by looking at in a one-year view.
You can record an estimate of what you think you spend in each category. If you don’t see a category listed (for example, if you have a monthly gym membership) add another line to customize to your needs.
Audit your spending
In order to fill out each month’s budget correctly, you will want to do an audit of your spending. I have a detailed post on how to audit your spending here. If you already have a good idea of how much you spend in different areas (groceries, restaurants, clothes, etc.), you’re all set.
Otherwise, log in to your bank and credit card accounts online and do an audit of the last three months of spending. This should give you an average of how much you really spend. The difference could be surprising.
“In order to fill out each month’s budget correctly, do an audit of your spending.”
Filling out your budget spreadsheet
Okay, so there are three main sections to my budget spreadsheet: debt, total income and expenses, and your budgeted categories. Let’s go over each one.
The debt section: List out of all your debts in the budget
At the top of the Google budget template is the debt section. I list this separately at the top because I want this to be the biggest reason you are doing this. Do some digging for any outstanding debt that you have. Start logging into lending institution sites and record total amount of debt, minimum payments and interest rates into the spreadsheet. This will help you organize your debt from smallest to largest according to debt amount or interest rate.
Total income and total expenses section
This section is my favorite. Mainly because you get to see exactly how much you brought in for the month, how much you spent in total, and any money that may be leftover. It’s important to forecast what you think you will bring in and what you will spend in the month prior to the month beginning.
That means you will want to budget around the 30th or 31st of every month with your forecasted amounts ready to go. If you try to do this in the middle of the month, you won’t be as effective because you have already most likely spent money and didn’t budget for it.
In the actual column, you will want to record what you actually earned in income and what you actually spent. The spent columns will automatically update as you update your budgeted categories (more on that in a second). I added formulas to make this easy on you, but if you have questions, just give me a shout.
The budget categories: the 4 F’s to every good budget
Now comes the fun part. The actual budgeting! I break down my spending into four major budget categories: fixed, fun, fudge, and future.
Fixed budget categories
Fill out all of your fixed expenses for the month under this sub-section. This could include rent, cell phone, utilities, internet, Netflix, insurance premiums. Anything that is predictable and roughly the same cost each month goes under the fixed category.
Fun budget categories
Next is the fun category. Damn straight you can still have fun on your debt free journey! I budget for things like movies, bars, shopping, clothes, restaurants, and gifts. You can choose what categories make sense in your life right now. Remember, the goal is to become debt free as soon as possible, so careful not to get too carried away with this category.
Fudge budget categories
This category is specifically reserved for all of those times where you have that Ralphie moment. You know. The “Oh, fudge” moment.
If you forget a birthday card, need random cough drops, or purchase something that doesn’t belong to another category, this is where all of your miscellaneous expenses goes. If you find yourself using this category often, you may want to consider budgeting for that item regularly moving forward.
Future budget categories
The last major section to the budget template is reserved for future expenses. Every good budget puts savings aside for the future. This could include savings for vacations, a new car, down payment, or investing goals.
If you are still in debt, paying off debt must be the priority. You can still save for future goals, but you should be throwing a massive amount of money towards the debt until you are debt free. For example, I would save between $50-$100 per month towards a vacation fund, but I would put $1,000 towards my student loan debt at the same time. Debt payoff was my priority. But I still gave myself permission to go on a budget-friendly trip if I wanted.
Fill out one month, then duplicate
Once you have your budget template the way you want it, simply right click the arrow next to the monthly budget tab you filled out and click “Duplicate.” I usually do this on a month per month basis. Things change throughout the year, and I don’t want to constantly change my budget categories.
You should have some flexibility because life isn’t always the same each month. Allow yourself some grace to change things if you need to change them. And that’s it! I hope you find this tool useful as you start your debt free journey.
Wanna accelerate your budget habit? Start by controlling your spending. My 50-PAGE workbook bundle is just the thing to help you reign it in and start living a debt free life. Check out the How to Control Your Spending Workbook