Making Your Own infiBudget

Now, it’s time to make your own infiBudget!

What You’ll Need:

  1. The infiBudget spreadsheet for your current situation (Single or Couple)
  2. Your recurring bills
  3. Your paycheck
  4. 2-3 bank accounts (at least 2 of which are checking accounts)
  5. Estimated living expenses for necessities outside recurring expenses (food, clothes, gas, etc.)

Optional:

  1. Financial tracking software such as Personal Capital or Mint (will help make estimating #5 above easier and let you visualize your progress)

How to Set it Up:

  1. Input all recurring expenses under their appropriate monthly or yearly headings along with the amounts paid on each. For expenses that occur quarterly (such as property taxes) or are variable but warrant individual budgeting (like utilities), put their yearly costs/estimates in the yearly column.
  2. Input your income along with the number of times per year you get paid in the income area. If you get paid weekly, assume 52 paychecks per year. Include both gross (before taxes and deductions) and net (after taxes and deductions) in the income field. Including both will affect savings rate calculations on the 2nd sheet.
  3. On the top left of the second page, it lists the 3 accounts you will use. I’ve named them Obligation (bills), Slush (variable living expenses), and Savings. Input the percentage you get from the first sheet as the percentage next to the Obligation Account Percentage always rounded up. For instance if the expense percentage you get from the first sheet is 61.2%, use 62% as your number for the 2nd sheet. Next, put the difference of the above percentage and 100% in the Slush category (38% in this example).
  4. Now you need take stock of what your estimated day to day living expenses are and compare that to the amount in the bottom right of the page (Yearly Slush Funds). If the amount you’re estimating exceeds that number, you’re in trouble and are going to need to cut expenses somewhere. If the number you’re estimating is less than that number, take your estimate along with additional money for lifestyle expenses and subtract that from the Yearly Slush Funds number. The resulting value will be yearly amount you can safely save or put towards your financial goals without impacting the lifestyle you budgeted.  For more on this step, see here.
  5. Take that savings value and divide it by your yearly net income to get a percentage. You can then break this percentage up depending on your goals. If cash savings is a goal, you can put some or all of that percentage into your third account. If debt reduction is your goal, put additional amounts into the Obligation account since you’re debt accounts are likely to be linked to that account. At this point, you’re done setting up the budget.
  6. (Optional) If you have an employer sponsored investment account where the contributions get taken out of your paycheck, put the percentage you contribute in on the 2nd sheet as well. It will help determine your savings rate.
  7. Build up the account you’re going to use as an Obligation account so that you have at least 1 full month’s expenses. This is to make sure that when bills come due all at once, you don’t overdraft the account.
  8. Contact your employer’s payroll department and have them divert money from your paycheck into the 2 or 3 accounts at the percentages specified in the budget.
  9. Once your paychecks start getting diverted, the far right of the 2nd sheet will tell you if you have overages going into your Obligation account. At this point, it’s up to you what to do with them but it should become a routine that every time you get a paycheck, you do something with the dollar amount prescribed by that value. I personally like to have at least 2 months saved in the Obligation account but you can adjust that minimum number as you see fit.

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