Step By Step: Creating a Budget Plan

Creating a Budget Plan

You probably hear it all the time growing up – “make a budget”, “stick to your budget”, “don’t spend outside of your budget”. Sure, that all sounds great but if you’re like most teens, your mental response to all of that is “Yeah sure, okay. Whatever you say…” At Teen Finance Tips, we get that. We’ve all had those experiences too, which is why we are here to help you make the best decisions and see the value in all those things you’re tired of hearing.

We’ve created a basic budget template in Google Sheets for you to download, use, change, and do whatever you want with to help you make smart decisions with your money and achieve your financial goals. Follow this guide on how to set up your budget plan and get to saving!

 

Types of Budgets and Budgeting Styles

Before we begin, it’s essential that we say that this isn’t the “one size fits all” resource. This is only a very simple tool to help you along the way in creating a personal budget and optimizing your savings. There are tons of different budgeting styles, techniques, and strategies that have been created over time and it’s important to figure out what works for you.

 

Downloading the Teen Finance Tips Budget Template

We created our budget template in Google Sheets, for ease of access and use on a computer or right from your phone. To utilize this you’ll need a Gmail account, and if you plan to use this on a phone, you’ll have to download the Google Sheets app.

First, open the sheet.

Next, go to “File” > “Make a copy…”. Feel free to rename and save wherever you prefer in your Google Drive.

Create a Budget

There are four tabs, the first two being an example, and the second two being your template to work from. Feel free to delete the “Example” tabs after you get the hang of it.

 

Step 1: Initial Setup of your Budget

Before you begin calculating how much you should be saving, you’ll need to personalize your budget. Start by filling out your “General Information” such as your name, the date, your current savings balance, and your weekly spending allowance. Be realistic with your spend allowance – you’re of course able to increase or decrease this as you go (and you should) but start with a comfortable amount that won’t leave you broke half way through the pay period.

Then move on to your “Goals”. The first one should always be your primary savings account at your bank or credit union. If you don’t have one, we highly recommend you do some research to find the best bank or credit union near you. If you have multiple savings accounts, which is a great idea especially if your job offers direct deposit into your savings, be sure to list them separately. Other goals can be big purchases or life events that you want to save up for.

Create a Budget - Financial Goals

You’ll need to fill out the fields underlined in yellow, the rest will calculate for you! This is based on the current date so these numbers will update over time and give you guidance on how much to save with each paycheck to attain your goals. The total circled in red is the amount per week that you’ll need to save to reach every goal you have listed.

Step 2: Calculate Your Income

Here you’ll need to fill out the information in the yellow box. There are options for up to two jobs, if you only have one just leave job 2 blank. For “Amount Earned” be sure to list the income that you’ve received in the period of time selected above. Below you can see your income for one period, one month, and one year before taxes based on these amounts.

Create a Budget - Income

Step 3: List Your Expenses

Next you’ll need to list all recurring expenses. There’s no need to list items that aren’t on a regular schedule like “Buying a pack of gum” or “Going out to the movies”, these can come out of your spending allowance. Note that this amount should be your Monthly expense. If you need assistance converting an amount to monthly, reference the conversion formulas below.

Weekly – multiply by 4 ⅓ (average number of weeks in a month)

Every 2 weeks – multiply by 2 ⅙

Semi Monthly – multiply by 2

Step 4: Find Out How Much You Should Save and Deposit

Next, calculate how much you have to save. Just select the “deposit period” and list any cash that you have left over from last time. Then you’ll see the total “Save Amount” which should be distributed among your goals. You’ll also see the amount “Left over after all goals”, which is after subtracting your spending allowance and all goals you have listed. You can use this to help manage your spending.

If the bottom number is negative it will appear red. This means that you don’t have enough to save the recommended amount for all of your goals. You should consider scaling back your goals or the amount you give yourself for spending.

If the bottom number is very high and green, like the example below, this indicates that you have left over money after all of your goals and spending. This is great! You should consider increasing your savings account goal or adding a new one!

Deposit your “Save Amount” into your bank account(s).

 Create a Budget - Deposit Calculation

Step 5: Distribute to Your Goals

For this step you’ll have to jump over to the “Savings Log” tab. Here you will distribute your “Save Amount” among the goals you have listed. Just mark the date, amount you plan to save, and what you’re saving for. Be sure to list each separately. There is also a section for any notes you wish to take. This log will update the amounts on the first tab to show you the progress on your goals.

Create a Budget - Savings Log

It’s a Personal Budget, Make it Personal

That’s it! It may seem like a lot, but once you get in the habit of thinking this way it’ll be simple. Remember that You’ll need to adapt over time for changing expenses, income, or spending habits. This is only a starting point, so make it work for you! If you have any feedback or things that you would like to see differently, please don’t hesitate to let us know by sending us a message. Just be sure to mention that you’re talking about this sheet. We hope this helps, happy savings!