“A budget helps create financial stability. By tracking expenses and following a plan, a budget makes it easier to pay bills on time, build an emergency fund, and save for major expenses such as a car or home. Overall, a budget puts a person on stronger financial footing for both day-to-day and the long term.”
– Investopedia
Why We All Need a Budget
Whether you are living paycheck to paycheck or you have a comfortable six-figure income, budgeting can help everyone achieve their financial goals. I started budgeting using a google sheet when I was in College and the results for me have been awesome! In three years after graduating College, I made four gigantic purchases:
- Bought my dream car
- Paid for the extravagant wedding that my wife and I always wanted
- Flew to Hawaii for an amazing honeymoon
- Purchased my first home so that my wife and I could start our little family
Is this all thanks to the power of budgeting? Hell no! My wife and I both have great jobs that pay well. But if we didn’t budget our money, I promise you I would not have been able to afford at least two out of those four big purchases I made.
I also want to make sure I’m not misleading anyone – it wasn’t easy. And yes, we did end up going into some debt. Debt is inevitable. But the key to managing debt is to decide whether you can afford to take it on in the first place. And that is where a thorough, well-thought out budget can be helpful.
Don’t Pay to Budget…
But before you go download some confusing budgeting app that offers you limited use unless you purchase the non-free version – or before you surrender to the limitations of the free version, try my proposal. Create a Google Sheet of all of your expenses and track them. Is it challenging at first? Yes. I spent a few hours beefing up my Google Sheet so that I covered all of my expenses to make sure I never miss a payment and to get a transparent view of my habitual spending, credit lines, and potential savings every single paycheck.
The benefits of budgeting this way are beyond measure. The biggest advantage is that you organize it the way you want to. We all have different spending habits. And those change over time depending on your living situation, job, relationship, dependencies, etc. So being committed to a single static app or suite of apps isn’t a long term solution. If you do it right and take the time to make a good (doesn’t have to be great in the beginning, you can make it great over time) budgeting Google Sheet, you will, without a doubt, be able to gain that extra financial stability you have been craving. And I will show you how to do it right.
Every time I make a purchase, or when a recurring purchase like a subscription hits my account (or credit cards), I update the Google Sheet. This way, it is always up to date with the latest expenses. This is something that I found as a major disadvantage with other budgeting apps or sites, like Mint. I linked all of my credit cards and bank accounts, but when a purchase was made, it didn’t update my budget immediately. And I don’t blame the app/service because sometimes even the credit cards will not post the transaction until it is verified. Most times a transaction will be pending which may/may not show up on your account transaction history. Even if it does show instantly on your account, the delay between the transaction posting on your account to your budgeting app may mean that you go over budget which could mean overdraft, going over your credit limit, or not having enough to pay for the things you wanted. Whatever the result, it’s never good when we are blindsided by our expenses.
Benefits of Using Google Sheets to Budget
Is it more time-consuming to manually enter in your purchases? Slightly. But the benefits are worth it! By manually updating your expenses, your budget is always up to date, as mentioned earlier. But better yet, it is a great way to help you with your financial self-discipline! And if we are being honest with ourselves, the lack of financial self-discipline is the root cause to a lot of our financial troubles. By seeing how much you have spent and how much you have left in your budget, it’s much easier to make smart purchases and avoid the needless spending (or at least delay it until you can afford it).
This does require some oversight. But that’s the whole point. By updating it every day, you will inevitably see how you are doing – whether you will meet or exceed your budget for that month/paycheck period. In doing so, you will be able to control your spending or, at minimum, adjust your expectations to reflect more realistic spending habits. It will also force you to check your bills and credit card statements regularly. This means you will always be aware of suspicious activity on credit card accounts (which happened to me before) or a bill over-charging you (which also happened to me before). You will catch these errors early and take action so that it is impossible be stolen from – whether accidentally or maliciously.
You may also be asking, why Google Sheets? Why not Excel or something? The only benefit of using Google Sheets over Excel is that you can easily share it with others. My wife and I have a shared folder in Google Drive that stores Expense Reports – we call our budgeting Google Sheet an Expense Report – dating back to 2019 (I didn’t save them in College, I just used the Google Sheet for my budget and restarted it when I needed to). In saving past Expense Reports, we can track our spending habits and have an accurate log of purchases in case of discrepancies. Come tax filing season, they can also be used for accurately expensing tax write offs!
How I Do It
Each Expense Report is used to budget for a single paycheck period – which is half the month since I get paid on the 1st and 15th of every month. After a paycheck period, I reset the Google Sheet by zeroing out all my purchases and starting my budget from scratch.
After logging every purchase into the Expense Report as it is purchased, I will review the Expense Report at the end of the paycheck period. I will review my checking account, savings accounts, and all credit card transactions to make sure that all transactions are reflected in my expense report (sometimes I miss a few). Before erasing my purchases to start a new Expense Report for the new paycheck period, I save the expense report and name it according to the paycheck period that I used it for (ex: 8.15-8.30 for August 15th – 30th) so that I have data about my past purchases and spending habits. This has proved to be extremely useful because I can keep logs of purchases to ensure that purchases and returns went through and to see how often I go over/under my budget so I could edit my budget accordingly over time to estimate a more predictable spending habit.
That’s it! Feel free to check out the video below where I walk through my actual Expense Report so that you can correlate the ideas I explained in this article to the real deal. Happy budgeting!
Obtain Your Own Template to Get Started!
If you want a jumpstart on creating your Google Sheets Budget, download our Bi-weekly Budget Google Spreadsheet and save some time on the setup front so you can get started today!
