How To Budget Like A Badass – The Easy Way (Part 1)

MichaelHow to, Income, Misc, Saving Money9 Comments

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Budget Like A Badass – PART 1

There’s no better time than the present to get your finances in order.  But in order to do that, you’ll need to know where you’re at, so you can figure out where you’re going.  How do you do this?  With a Badass Budget of course!

So, what’s the big deal with having a budget?  If there was one tool that I’d attribute to helping me join the double comma club by 29, this would be it.  Most of you probably already have some preconceived ideas about budgets (eg. it’s a hassle), but stick with me for a bit.  I’m here to tell you it’s NOT as bad as you think.  You can figure it out!  In fact, I’ll walk you through my exact process I use personally.

What is a budget anyhow?  A personal budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment.

In layman’s terms, it’s a plan that shows you where your money is going to so you can control your expenses.  It’s the tool that will give you insight as to if you’re on track with your financial goals, or need to make adjustments.

Why You Need a Badass Budget

crystal-ball-32381_640Having a budget is like having a crystal ball into the future.  The better you get at it, the better you’re able to predict your future and subsequently control it in your favor.  Think of it as a map to your future wealth.

Here’s the good news.  It doesn’t need to be complicated.  In fact, it’s rather easy once you start doing it.  You might even find you become addicted to checking your budget often!

Anyhow, I use two tools to make up my badass budget which I’ll share with you here.

The Secret Ingredients to a Badass Budget

1. My Personal Budget and Cashflow Spreadsheet

This spreadsheet is something I use personally developed and have been tweaking over the past few years.  This will help you to estimate your monthly income and expenses so you will understand your personal cash flow.  Don’t get hung up on getting it perfect in the beginning, it’s more important to just get something down so you can begin tweaking it over time.

You’ll notice that I tried to keep it detailed enough to capture all expenses you may have, but also simple enough to understand.

2. Personal Capital

This site helps you to aggregate all of your accounts into one centralized location and gives your dynamic (real time) data in an easy to understand dashboard.

Disclaimer: If you click on any Personal Capital links and sign up, I may earn an affiliate referral fee (much appreciated).  However, there is absolutely NO COST to you, and I’m only suggesting this site because I use it personally and find it valuable.

I use Personal Capital in conjunction with my Budget and Cash flow Spreadsheet to update my budget monthly, and gather additional insights to my actual cash flow during a given month.

How To Use The Budget & Cashflow Spreadsheet

So in this section, I’ll walk you through exactly how I use these tools to help create and manage a badass budget.

The reason I believe it’s so important to create and use a budget in a spreadsheet is that it helps your brain to internalize the numbers consciously, and unconsciously as well.  The simple act of doing this gives you power over your prior limiting believes about what you could accomplish on your own.  So, don’t hesitate!  Download and open this now.

Budget-Cashflow 1

When you first open the Budget and Cashflow Spreadsheet you’ll notice it’s divided up into 2 main sections.

  1. Income (Green)
  2. Expenses (Red)

As you scroll down through the spreadsheet, you’ll find many more sections to the expenses as we all typically have more expenses than we do income (if not, then you’re my hero!). I’ve tried to capture most types of expenses you may incur, but you can always add additional line items in the spreadsheet as necessary.

Budget-Cashflow 2

Scroll all the way to the bottom of the spreadsheet and you will find two tabs on the bottom.  This is where you’ll find the corresponding year.  Above you’ll see that we’re in “My 2015 Monthly Budget”.  So, when you start your budgeting, remember to start from the current month (eg. Nov. as of today).  For the estimates beyond December, simply click the tab for 2016 and continue your forecasts into this tab.

*Don’t worry about the Savings to Income Ratio having values of “#DIV/0!”  It’ll automatically fill in a percentage once there are real numbers entered into the spreadsheet.

So, just to get your feet wet, I’ll walk you through entering some basic data.

Let’s start in the Income section.

Budget-Cashflow 3

In this example, you’ll see that I’ve added my wife’s income as the primary wage earner.  Since I’m a Stay-at-home-Dad, my wages are $0!  But, we also have some passive income from rental homes, dividend income, and P2P (peer-to-peer) interest income.

The income section should be pretty straight forward, but just remember that we’re entering in wages after deductions.  In other words, this is the monthly cash deposited into your bank from your employer.  If it fluctuates because you earn commissions or bonuses on top of a base salary, you can enter this extra income into “Wages Misc”.

The nice thing is that once you’ve figured out November, December should be a piece of cake!  You can simply re-enter the amounts into Decembers column, or you can copy and paste the values from November.

Remember, at this point, we’re just entering in estimates to get a ballpark figure.

Next Up, the Expenses

Budget-Cashflow 4

A couple things to note here.  You’ll see a couple red arrows pointing to “+” and “-” symbols.  This is where you can open and close the details for a particular sub section.  For example, I have the sub section “Primary Home” expanded so I can fill in the details accordingly.  But, at the moment, we don’t own a second/vacation home.  So, I’ve gone ahead and collapsed the details for the this sub section just to keep things easier to read on the screen.

Under the “Primary Home” sub section, you’ll see I added our monthly mortgage payment for our primary home.  (If you don’t own your own home, simply use this field for “Rent”).  I filled in the other applicable expenses like electric, water, trash service, cable, cell phone, etc. and the total for this sub section is automatically calculated.

Budget-Cashflow 5

I also need to fill in the sub sections for each Investment Home I have too, followed by all other daily living expenses, transportation, healthcare, etc.

When all is completed and filled in, you’ll find a comprehensive total of all Expenses calculated for you at the bottom, as well as at total CASH SHORTAGE/SURPLUS calculation.

The CASH SHORTAGE/SURPLUS is a key number we’re after.  It tells us whether or not you’ll be profitable in a given month.  If not, don’t worry about it yet.  It’s more important that you begin to internalize your spending habits before trying to make drastic changes right away.

Finally, on the bottom of the sheet you’ll find two ratios which will tell you how much you’re saving in a percentage, as well as how much you’re spending in a percentage relative to how much money you’re making.

Budget to Actual

Once you’ve got all the details filled in for a given month, try to this for the next 11 months.  This will give you an entire budget for the year.  You’ll find the subsequent months will be very similar, but don’t forget about large expenses that come along once or twice per year (eg. auto insurance premiums).  You’ll want to make sure to add those in also.

After creating your budget for 12 months out, you’ll want to begin tracking your actual monthly expenses and income to see how accurately you budgeted for.

What I like to do after each month, is go back and enter in the actual expenses and income realized for that particular month.  This process helps me to see where I over or under estimated, gives me insight as to what I can update in future upcoming months, and helps me to internalize my cash flow.

Here’s the trick though, we’re going to use Personal Capital to do the heavy lifting for this process.  Stay tuned for details in PART 2 (<— now live).




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Hi, I have been blessed to take an early retirement in my mid-30's so I can focus on becoming a better father, blogger, and investor.

My goal is to help you find your personal path to financial freedom, and to enjoy the entire journey.

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9 Comments on “How To Budget Like A Badass – The Easy Way (Part 1)”

  1. Hi Michael. This is a badass post! Super thorough and helpful. I’m not big on budgeting, but you’ve inspired me to consider it all over again.


    1. Part 2 is the easy part, but combining it with Part 1 is priceless. Truth is, once you’ve done it enough, it becomes like riding a bike and all you have to do is pedal forward!

  2. Just downloaded your spreadsheet. Very impressive Michael. I have a similar sheet, just a little bit more narrowed down and simpler. Seeing your sheet got me kind of inspired to look more into having more of an extensive and more detailed “bad ass” budget spreadsheet.

    It does give you a complete overview of absolutely everything. I kind of love it, although I’m a little afraid to go overboard with it. It can also be very intimidating at times when you have a hard time actually budgeting everything.

    When I first started budgeting that happened to be the case. I barely made enough money while living in an expensive neighborhood to make ends meat and it was just a little too intimidating. Definitely inspired to get a little deeper into it.

    Looking forward to part 2!


    1. Thanks for diving in Peter. Yeah, when I first created the sheet, I didn’t have the toggles to expand or contract the expenses, so it was super long! (And depressing that there were so many more expenses than income – haha)

      Anyhow, I just posted Part 2. Hope you like it. 🙂

  3. Such a badass man! Hope you don’t mind my profanity (although downunder) this word isn’t considered a swear word 😉 ha..

    It’s a very involved spreadsheet you’ve got there.. I do something similar and it’s great as in most cases the numbers don’t lie

    Nice that you were a millionaire by 29 too! Didn’t know what the double comma club meant initially although thought a bit harder then I got there haha.. I’ll be interested to get to your net worth posts to see if that includes you real estate assets too, I’d say it would

  4. Pingback: 10 Questions with Financially Alert - 1500 Days to Freedom1500 Days to Freedom

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