You Should Really Use a Budget

# Summary

The author promotes the use of a budgeting spreadsheet to effectively manage personal finances and encourages its adoption by providing a free template.

# Abstract

The article emphasizes the importance of budgeting through the use of a personalized spreadsheet. The author, who enjoys data analysis, has developed and refined a budgeting spreadsheet over the years, which they have found invaluable for tracking finances. Noticing that friends did not use budgets, the author was motivated to share their spreadsheet and advocate for its benefits. The spreadsheet helps users understand where their money goes by showing percentages of total income allocated to each expense, facilitating better financial management. It also includes a feature to aggregate savings across multiple accounts, aiming to simplify the process of tracking overall savings. The author argues that using such a tool is crucial for financial stability and offers their spreadsheet for free to help others achieve this goal.

# Opinions

- The author believes that managing current finances is more important than solely focusing on making more money.
- They advocate that understanding the percentage breakdown of expenses is crucial for effective budgeting.
- The author emphasizes the importance of saving for the future and sets a personal goal of saving 20–25% of their gross income each month.
- They suggest that tracking expenses, managing debt, and saving proactively lead to financial stability and peace of mind.
- The author encourages the use of their budgeting spreadsheet, highlighting its ease of use and the benefit of having a comprehensive view of one's financial situation.

I’ve created a free spreadsheet for you

As someone who enjoys tracking and analyzing data, I’ve always been a fan of budgeting spreadsheets. I’ve been using one for years to keep track of my finances.

Recently, I asked a few of my friends if they also use a budget. I was surprised to find out that not a single one of them did. They were more concerned about making more money rather than managing what they have. Big mistake.

This led me to further develop my own spreadsheet, share it, and write about it.

If you care about your hard-earned dollars, it’s crucial to know where every cent is going.

People hardly think in terms of percentages. One of the biggest advantages of this spreadsheet is being able to see the percentage of your total income that is going towards any given expense.

% of income field is auto-calculated for you

I created a separate row that shows the percentage of my income that is going towards that expense.

Assuming we all have a future, it’s important to save for it. I aim to save at least 20–25% of my gross income each month, but it can be difficult to calculate this figure when you have savings across multiple accounts such as a 401K, Roth IRA, Emergency Fund, and HSA. To make this process easier, I created a separate tab in my spreadsheet to calculate my total savings across all accounts.

Did I mention it’s free?! By keeping track of your expenses, managing your debt, and saving for the future, you can achieve financial stability and peace of mind. If you haven’t started using a budget spreadsheet yet, I highly recommend giving it a try.

preview of my personal monthly budget spreadsheet

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