How a Simple 3-Column Budget Sheet Can Help Track Spending

The word budget is a four letter word for many people. But it doesn't have to be. Living on a budget can simply mean living within your means. In order to do so, you need to know how much you're spending on everything and plan out your monthly expenses. This isn't a scary process either. Just make a simple budget sheet for each month and you'll be organized in no time.

I have used this type of budget sheet myself for many months. It does help me keep track of my expenses, and keeps me from overspending. This budget sheet should have three columns, done in different colors so you can tell at a glance which one you're looking at.

The first column, on the left side, shows your bills and expenses for the month. I do this column in green. List the expense, amount, and due date. Entries should look something like this: Sept. 1 Rent $500. Keeping these entries in chronological order is essential. Each month, list every bill you expect to have.

The middle column shows what you actually paid or spent. (I do this column in blue.) This column of the budget sheet allows you to see whether you're living in your means or not. If you listed in column one that you expect to spend $200 on groceries this month, but column two shows you actually spent $300, you may need to adjust how much you expect to spend on groceries.

The third column of the budget sheet is where you figure out your cash flow. I recommend doing this one in pencil, if you are hand writing your sheet each month, as you may end up revisiting this column a few times a month. In this column, I figure out when my pay days are, and which bills will be covered by a certain pay check. For example, pay check #1 will cover bills 1-5, and pay check #2 must cover the rest of the bills.

Using this three column budget sheet is pretty simple. At or just before the beginning of each month, fill in the green column with all your expected expenses for the month, and pencil in your cash flow in the right hand column. As you pay each bill, fill in the blue (middle) column with what you actually paid. At the end of the month, total the green and blue columns to see if you overspent.

As you pencil in your cash flow, compare it to the grand total of the green column. If your cash flow for the month is expected to be $3,000, and your total amount of expected bills for the month is $2,000, you know you have $1,000 to allocate to miscellaneous expenses. Miscellaneous expenses could include car maintenance, shopping, etc.

I admit this three column budget sheet may only work for the incredibly anal and disciplined. However, it can help you see exactly where your money is going versus where it should be going. I developed this process for myself and have had success with it.