The Monthly Budget Planner
In Detail

Welcome to the (extremely!) detailed description of how to set up and use the monthly budget planner. As I mentioned in the introduction to the planner, this is the tool that brings your budget plan to life by acting as your road map through each month’s expenditures.

Like any good map, the instructions include a lot of detail, but the actual navigation of the journey is quite simple. And like most journeys, this will be unfamiliar territory your first time through. But each time you do it, it will be easier and easier.

So, take a deep breath, and let’s get on the road!

  1. The first thing to do each month is to be sure your beginning balance is written in a blank space at the top of the month’s calendar page. To start, your beginning balance is basically the total in your checkbook. Once you begin using your budget planner, your beginning balance each month will come from the ending balance of the month before, which should also correlate to your checkbook balance.
  2. Write in the amount of your expected income on the dates you get paid. I get paid on the 15th and the last day of the month, so I write “+1,500” on the 15th of the month, and again on the last day of the month. You might get paid on the 1st and the 15th, or every other Friday, or possibly just once a month. Whatever your pay period, write your income on that date.
  3. Now let’s enter your expenses. Write your expenses, one-by-one, on the date you plan to pay each one. Some of them have specific due dates – for example, your rent may be due on the 1st of the month. Others are more flexible and you should arrange them according to your pay schedule, spread evenly throughout the month to be sure you have the money to cover them.

    1. I don’t list my utilities as individual expenses. Instead, I add them together and budget a total “utilities” amount each month. My utilities category includes electric, gas, water, trash, phone, cell phone, TV cable, and internet. You may have other expenses that you want to include in this category.

      Once I have the utility total, I write it in a blank space on my monthly budget planner. I pay the utility bills one-by-one as they come in, and each time I pay a bill I subtract the paid amount from the utilities total. Then I erase the amount written on my planner and write in the remaining balance.

      I do this throughout the month until all of my utility bills have been paid. If I’m lucky enough to have utility money left over at the end of the month I add it to next month’s utility budget. Sooner or later I’ll have an unexpectedly high power bill or cell phone bill (if you have teenagers you know what I mean!) and the extra will be there to cover it.

    2. On your budget worksheet I had you list every expense separately. That was important to be sure you identified every place your money goes. Now that you’ve done that you may prefer to group some of them together in a miscellaneous category to make it easier to work with them each month. My misc group includes things like doctor & dental visit co-pays, prescriptions, and a small pool of money just for the inevitable unexpected expenses. Your misc group can be made up of whichever expenses make sense to you to include. But always be sure to include an undesignated amount for extras.
    3. Two other categories I lump together rather than listing as separate expenses are my cash and my savings. These two categories of expenses are handled in a unique way, so if you haven’t yet read about the three categories of expenses – checking, savings and cash – you should do so before going further on your monthly budget planner. Just click on the links below. Once you’ve learned the secret of cash expenses and savings expenses, come on back to continue setting up your planner.

  4. Now that you’ve learned how the cash system works, I hope you’ve done the exercise to determine the interval of your cash infusions and how much you need to budget for each infusion. You’ll need this information to continue.

    Here’s how it works for me: I withdraw cash about every 2 weeks (correlating with my pay dates) to replenish my envelopes for groceries, gasoline, clothing, fun money, the gardener, my weekly allowance (for coffee, eating out, etc.), and my personal money that I save for buying gifts or CDs, or something extra I decide I just have to have. The total of all those expenses make up one cash infusion, so on my monthly budget planner I enter that amount on the 1st and 3rd Fridays of the month. You’ll have to decide when in each month is the best time for your cash infusions to replenish your envelopes.

  5. It works best for me to write my savings expense amount in the blank spaces on my monthly budget planner instead of on a specific date because I make that deposit at different times in different months. You’ll have to decide when in the month you make your savings deposit. If it works best for you to stay disciplined and make it on a specific day each month, then definitely go with that and record it that way on your monthly budget planner. Just remember that wherever you write it, it is a real expense and must be paid at some point during the month!
  6. You know the blank days on a calendar template before the first day of the month and after the last day? I use those blank spaces of my monthly budget planner to record special expenses that don’t have a specified due date – one-time expenses or things that are unexpected, like carpet cleaning, dental or medical costs, my granddaughter’s summer school expense, etc. I track them by capturing them on my planner, and then I adjust other categories (usually the miscellaneous category, or my “tax & insurance” fund) to find the money to pay them.
  7. As you pay an expense, just put a line through it in your planner to indicate that that money has already been spent. When you pay an expense that is part of a group of expenses, like the utility expenses I discussed in the Monthly Budget Planner: Intro & Overview, subtract that amount from the group’s total and adjust your planner to include the new remaining total for that group of expenses. That sounds complicated, but it’s not at all.

    Here’s a more specific example in case my explanation hasn’t been very clear: Let’s say you’ve budgeted $350 for all of your utilities and that amount is written in the margin of your monthly budget planner for this month. On the 10th of the month you pay your $60 phone bill. You will erase the $350 and write in the remaining utilities budget of $290 ($350-$60.) On the 15th you pay your electric bill of $100. Again, you’ll erase the utilities amount (now $290) and enter the remaining utility budget of $190.

    Here’s another example: If you start the month with $300 miscellaneous and you unexpectedly have to pay $100 to repair the car, you’ll erase the $300 and write in the remaining miscellaneous budget of $200.

    And so on…

    See – it really is pretty simple. This way you avoid carelessly overspending because you account for, and track, every dollar.

  8. After you’ve written in all of your income and expenses for the month, do the math and write your month-end balance at the bottom of the page. “Doing the math” is easy – just start with your beginning balance, add all the income, subtract all the expenses, and the answer is your month-end balance. Put another way:

    Beginning Balance + Income – Expenses = Month-end Balance

    As you make adjustments during the month, always re-balance and adjust your month-end balance as necessary, and then balance the planner with your checkbook as well. As long as you account in your planner for every dollar spent (or withdrawn) from your checkbook, the two balances will be very close. If they are ever more than a dollar or two apart, you’ll know you’ve made a mistake – either in your math or in forgetting to account for something on the planner – and you should backtrack to find the error and correct it.

  9. I usually set up my budget planner for 12 months or so at a time. This has several advantages. First, it feeds my control needs – I feel like I’m in control of my entire year of finances. Second, it lets me write expenses that have specific deadlines (like property tax payments or quarterly insurance payments) in the month they’re due so I don’t accidentally overlook them. Third, while it helps me project how I’m doing financially, it also highlights possible financial problems before they actually happen so I’m able to make adjustments to avoid them. And last, it makes it easier to end one month and move right into the next one.

That’s all there is to it. I know it seems overwhelming right now, but it’s really quite basic. Don’t let the amount of information here discourage you – it just takes a lot of words to fully explain the very simple and common-sense steps in using the budget planner! The more you use it the more sense it will make to you, and believe me – you’ll come to depend on it. It’s an important part of your budgeting process, and a critical tool for keeping control of your finances.

Monthly Budget Planner: Intro & Overview
Rethink Your Checking Account
Teach Your Savings to Multi-Task
The Simple Cash Budget

Return from The Monthly Budget Planner In Detail
to Living on a Budget