Budget Checklists for the DIY Budgeter

Budgeting, Personal Finance
Budget Checklists for the DIY Budgeter

Not everyone wants to input their income and expenses into a budget calculator, and if you’re the type who prefers to “show your work” with a pencil and spreadsheet, you need a well-organized budget checklist to work from.

Any budget template worth your while should have entries for all sources of income and all potential expenses. Ideally, these expenses will be classified as financial wants and needs, or in the case of our budgeting worksheet, needs, wants and savings/debt repayment. The more you can align the line items on your budget with your goals, the better.

We’ve organized this particular checklist according to the 50/30/20 budget. But even if you opt for a different budgeting approach, these lists are a solid way of organizing your income and expenses.

» MORE: How to build your budget

1. Determine your take-home (net) income

For building a budget, your net income should include your salary or wages and any additional money coming into the household. If you have insurance premiums or 401(k) contributions automatically deducted from your paycheck, add those back in. They’ll be considered expenses later on.

Income

 √ After-tax salary or wages
 √ After-tax part-time income
 √ Alimony/child support
 √ Insurance premiums deducted from paycheck
 √ Retirement contributions deducted from paycheck
 √ Any additional income (rental, self-employment, etc.)
Budget tip: If you’re self-employed, your income will be pre-tax. Make sure you include your estimated monthly income taxes as an expense in the needs category.

2. Take a pulse on your current spending

Once you’ve established your total net income, figure out what you’re spending each month. Organize your expenses into three groups: needs, wants and savings/debt repayment. Click through the three tabs below to see how these categories break down.

Needs

These are the expenses you cannot go without; they keep you safe, warm and alive. Using the 50/30/20 budget, these should account for 50% of your spending. See how your current expenditures stack up by adding the following things:

 √ Mortgage/rent
 √ Homeowners or renters insurance
 √ Property tax (if not already included in the mortgage payment)
 √ Auto insurance
 √ Health insurance
 √ Out-of-pocket medical costs
 √ Life insurance
 √ Electricity and natural gas
 √ Water
 √ Sanitation/garbage
 √ Groceries, toiletries and other essentials
 √ Car payment
 √ Gasoline
 √ Public transportation
 √ Basic telephone bill
 √ Student loan payments
 √ Other minimum loan payments
 √ Child support or alimony payments
 √ Child care
Budget tip: You may be overspending on needs. For example, you may need a car to get back and forth to work each day but might not be able to justify the luxury sedan you’re leasing. If you find your budget is way out of whack, look closely at those items you’ve classified as needs and consider downgrading.

Wants

These expenses can be anything you want them to be — items not included in your needs or savings/debt repayment. The checklist below is meant to get you started, as your “fun money” may go to entirely different items than the next person’s. In the 50/30/20 budget, wants should account for 30% of your spending.

 √ Clothing, jewelry, etc.
 √ Dining out
 √ Special meals in (steaks for the grill, etc.)
 √ Alcohol
 √ Movie, concert and event tickets
 √ Gym or club memberships
 √ Travel expenses (airline tickets, hotels, rental cars, etc.)
 √ Cable or streaming packages
 √ Wi-Fi (if you work from home, this can go in the needs category)
 √ Extra telephone features
 √ Home decor items

Savings and debt repayment

This is the money you’re putting toward your retirement, emergency fund and other savings, and using to pay down credit card and other “toxic” debt like payday loans. It also includes anything over the minimum payment on your “good debts” such as your student loans and mortgage. In the 50/30/20 budget, this should account for 20% of your income.

 √ Emergency fund
 √ Savings account
 √ 401(k)
 √ Individual retirement account
 √ Other investments
 √ Credit card payments (see budget tip below)
 √ Excess payments on mortgage
 √ Excess payments on student loans
Budget tip: Ideally, you pay off your credit cards each month, in which case you’ll classify the expenses according to what you buy — groceries under needs, for example. However, if you maintain a balance, you are accruing interest and fees, and payments should be listed under debt repayment.

» MORE: How to pay off your debt

3. Apply the 50/30/20 budget principles to your current spending

For each category, add up the expenses and divide by your net income to see how much you’re allocating where. Don’t be discouraged if you’re spending more or less than you should in a certain category; this is your starting point. Use what you’ve learned to make small changes in your patterns over time.

Every few months, revisit your complete budget form to see how you’re progressing. Use a budgeting tool or app to track your expenditures, saving you time as you build momentum with your new budgeting habit.

Elizabeth Renter is a staff writer at NerdWallet, a personal finance website. Email: elizabeth@nerdwallet.com. Twitter: @ElizabethRenter.