Changes to the way I budget

Over the years I have taken so many different approaches to the way I budget, however, I have now made changes to the way I budget in the hope that our spending stays under control and our savings go up as we continue our journey to early retirement.

When it comes to our budget I always do this on an excel spreadsheet, after all, I use excel all the time. It is easy to use and can be updated to reflect real-time.

We have a few separate tabs running in our spreadsheet, one is for the current month which is simple. It lists our income, so bank balance and any extra money due in. Then it has our outgoings listed, these are broken down into the things going out by direct debit then the additional costs which could be variable such as food and petrol.

I update this spreadsheet as things go out and it gives us a live total of our cash and where it could be used more.

Changes to the way I budget

On this document, I now have another tab which is for our whole year. In this tab I have listed all the months, this represents our payday throughout the year. Next to this I now list everything big the at is going to go out during the year, everything from MOT to road taxes to insurances and birthdays. I have also listed the estimated costs for each of these, for example, insurance, I estimate based on the current year’s cost.

When it comes to things like MOT’s I have put in the amount of an MOT plus a little contingency plan for any work that may be needed when the MOT is carried out.

The idea of this is to allow me to have a clear idea of what money will be needed at any month throughout the year, other than the everyday costs of living. It also then lets me see if I can make an overpayment from saving dependant on what is due to go out in the coming months.

Over time I may tweak how we use it however, for now, it is working well for what we need as at a glance I can see any payments coming up with minimal effort.

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