5 reasons you need a budget spreadsheet

by alex on June 19, 2010

Do you need some convincing as to why you need a budget spreadsheet? I did at first also. I figured it might be useful to share my top 5 reasons that I use my budget spreadsheet weekly.

Here are my 5 tips for why you must have a budget spreadsheet.

Use it to get organised

Stop putting your head in the sand, your finances aren’t going to improve unless you proactively work towards bettering them.

Getting yourself organised will expedite paying off your credit card, paying down your mortgage or perhaps saving for a holiday.

Without a plan we are nowhere near reaching our financial / budgeting goals.

Plan to live without debt via savings

Oh my god! Yes I said it, why not plan to budget your money wisely so that you dont ever have to buy mundane / silly items on credit? The only time you should use credit is to buy a house or a car perhaps.

Otherwise, you can use your budget spreadsheet to live without debt – simply budget your money to ensure your expenses are always met within your income range – believe it or not it is possible!

Remember the global financial crisis?

Well I sure do. That moment in time where everything just melted, property prices, shares, the lot! Well should that time ever arise again, I would like to ensure my credit debt (if any) is in control, paid in advance and my savings is as strong as an ox. Imagine losing your house simply because you didn’t have that extra $50-100 per month for payments.

Inflation and your household earnings

They say that each year we have inflation of around 5%. This means that the cost of everything around us goes up slightly. This is why you should be aiming to get a pay rise of atleast 5% per year – without such a pay rise, you are technically going backwards with your finances. Using your budget spreadsheet to consistently shave 5% off your yearly spending is as good as a pay rise for those who do not actually get one. If you however do also get a pay rise of 5%, imagine shaving another 5% off your spending – it would leave you with a total of 10% in pocket per year. Not bad!

Use your money to make you money, not to pay bills

Setting up a budget spreadsheet to make you money is crucial. This means, don’t just use it to track your bills – use it to hunt down areas you can improve and ways you can release more of your own money for money making activities. This might include shares, property or perhaps paying off debt that is accruing interest rapidly.

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