Budgeting Spreadsheets

by ryan on December 25, 2016




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Excel Budgeting Spreadsheets & Templates

 

Many people have experienced the wonder of Budgeting Spreadsheet. I would like to with you here on how Budgeting Spreadsheet has significantly helped people to achieve their dreams and path to financial freedom.

You often hear stories about people getting into financial problems. In some cases, the victims have to sell off their assets and properties to settle their loans or debts in order to pull through their financial problems. If a victim cannot settle the loans or debts completely and unless the creditors agreed to his pleads, there will be no other alternative than to be charged bankrupt.

The main reason of getting into financial problem is failure to manage own expenses properly and effectively.

money-manager-budget-excel-template

Therefore managing own finances and expenses is very important and in fact all of us are practising a certain kind of budgeting without realising it. Those who manages the expenses with their heads and without writing down formally is termed as an ‘Informal Budgeting’. Informal budgeting is the most convenient thing to do and most people loved that.

Disadvantages of informal budgeting plan.

1. You are not able to know your exact financial position at any time.

2. The possibility of overspent is very high.

3. You could have idle cash lying around compared to investing them for some returns.

4. Your budget plan is short term.

A formal budget plan is a plan written in clear and organized way. It is usually in a spreadsheet format.

Advantages of a formal budgeting plan.

1. Using a written spreadsheet to manage your expenses is just like a company managing its business with budgets.

2. You are clear about your financial status now or at any time in the future.

3. You could manage your cash effective and can avoid overspending.

4. You could do long term financial plan and roughly know how you stand financially at any time in the future.

5. You could maximise your returns on any idle cash.

6. You know how much extra cash for unplanned expenses.

The above are just some of the advantages and disadvantages that I can think of at the moment. There many more other that these.

My Experience

I used to manage my personal finances informally. One day a friend introduced me to Budgeting Spreadsheet to find our about myself. I was convinced and I wrote down all my income and expenses down on to a spreadsheet. The following are what I found out about myself.

1. I realized that I had a negative Net Worth Position on that day. However, the friend told me that there is no cause for alarm as I am still working and receiving an income every month. I was asked to extend the spreadsheet to up to 20 years in future.

2. I realized that most of my personal debts would be settled in the next 7 years time except for my housing loan which has another 18 years to go.

3. My net monthly cash surplus for the next 7 years is about $200 a month. But after 7 years, it went up to $2,000 a month.

4. If I am stick to my budgeting plan for the next 10 years, I would have a saving of $88,800 which I could use it for investment or vacation.

5. With such knowledge on my financial, I could now plan on how to maximize returns on my savings instead of leaving it lying idle in the bank accounts.

I personally feel that preparing a formal Budgeting Spreadsheet help a lot. I am clear of what I need to do now and in the near future. I know my financial limits and know how to avoid getting into financial problems. I know the route to attain my financial freedom and are more confident with my life and future.

Template Examples:

monthly-household-budget_large-excel-template

home-mortgage-calculator




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