Does the perfect budget template exist?

Bryce: [00:00:31] Welcome to Get Started Investing a podcast where we attempt to answer the most common money questions from the community to help us all become better investors. If you are joining us for the first time, welcome, We strongly recommend you scroll up and start at episode one. Now, while we are licensed, we're not aware of your personal circumstances. All info on this show is for education and entertainment purposes. Any advice is general advice only. But with that said, let's crack on. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How you going? 

Alec: [00:00:59] I'm very good. Bryce very excited for this episode, but right off the bat, pause it right now. Yeah, well, actually, if people pause it, they won't hear why they need to pause it. The last day of the Listener survey is today. We've got over a thousand responses, but we want more. We want to hear from you. Hear what we should keep doing in Equity Mates. What we should stop doing. What are the new things we should pursue? It's a great opportunity for you to help shape the direction of Equity Mates one day to go. So pause the podcast, fill it out or fill it out while you're listening to the podcast. There are massive Thank you to all those who have filled it out. It is a massive help.]

Bryce: [00:01:36] Yeah, it closes today and you automatically go in the draw to win $500. If you just complete the survey, that's all you need to do. 

Alec: [00:01:43] And free tickets to FinFest as well. Yeah. 

Bryce: [00:01:45] Prizes everywhere. 

Alec: [00:01:46] But Bryce. We're here to answer one common question. We hear from the Equity Mates community. Actually, a really common theme that we're saying comes through in the listener survey. It feels like getting on top of your money, getting your cash flow right. Getting those basics sorted is a real focus for the uncertain year that's to come in 2023. One thing that we've been asked a few times is what is a good budget template to use? 

Bryce: [00:02:14] Yes. What is it? Do you use a budget template? 

Alec: [00:02:17] No, because it's a surprise.

Bryce: [00:02:20] It's not a surprise. No, no. But last year you were talking about wanting to track your expenses. 

Alec: [00:02:25] So I'll talk about how I track my expenses. It doesn't include a budget template. We know that you have a convoluted spreadsheet. No, with index matches and some ifs. 

Bryce: [00:02:35] And so what you will find out later on in this episode is that I probably have one of the more simple approaches to it that's out there. 

Alec: [00:02:43] But what we want to do in this episode is also share a budget template that's free to download that Maddy and Sophie from your good company produced. So we're going to talk it through their template. We're going to talk through your template. 

Bryce: [00:02:56] I'm willing to share mine. 

Alec: [00:02:58] And we're going to, I guess, pull out the best bits of all of them.

Bryce: [00:03:01] Yes. Yes. So let's start at the top. I think because there is no one size fits all approach to budgeting is the takeaway that I've got. We've reviewed a number of budgeting templates in preparation for this episode. I've had a look at mine. As you said, you're in good company, shared this and they're all different. And just like dieting, just like exercise, where you want to achieve goals at the gym, set a plan. They're all differently. There's no one size fits all approach.

Alec: [00:03:29] I think we say it's like dieting because every, you know, all these fitness gurus online will tell you the right diet to follow. But really what works is energy in is less than energy out. And whatever diet you stick to, you're being intentional, you're being consistent, you're being disciplined, you being deliberate, like those are the things that actually matter. And it's the same with budgeting. Money in is more than money out is what you want to achieve. Yes. And all of the different ways to achieve it. Bucket budgeting, itemised budgeting and base zero budgeting, all of that stuff. It's really just whatever works for you to be intentional about your spending, to be considered and to be disciplined. Yeah. And so in that way that there's heaps of different ways to get at what is ultimately the same objective in dieting and in budgeting. Also similar because there's heaps of gurus online that will sell you a course and tell you how to do it. 

Bryce: [00:04:30] Yes, a budget is just a tool. At the end of the day, it's not going to solve the problem of you feeling like you're not on top of your money or you don't know where it's going. As you said, it's discipline, it's intention that solves that problem. The budget is the tool that helps you make the decisions to get to that end point. So I sort of sat down and thought, what are some of the elements that go into a good personal budget? And are these in, in my opinion, shouldn't really deviate too much? You want to be tracking all of the income that is coming in? You know, I don't go down to the level of like what are my dividends this year and that sort of stuff. I don't I don't because that's all reinvested as much as possible. So it's kind of just like what is the main chunks of cash that are coming in? Anything above that is a bonus. Great. Some people do go down to my new levels. Then you want to be tracking your expenses or accounting for your expenses. And to me this is where of all of the sort of areas you want to be as comprehensive as possible. Because that's. Where you see your money going out and that's where you can actually track what you've got left. At the end of the day, you want to track your fixed expenses, things like rent, mortgage payments, those sorts of things, utilities, internet, phone bill, etc. and then variable and where I mean variable, that's what you're going to pay yourself and things going out like gifts and expenses for travelling to mates, weddings and those sorts of things. They're variable expenses. You want to track your debt repayments and you also want to make sure you're putting away money in savings and investing and emergency funds. Then there's sort of like qualitative parts to the budget. And for me it's making sure the budget is flexible and allows you to be flexible. I think some people come unstuck when they make a budget so rigid that it gives them pain, like just doing it every month, like, Oh my God, do you want to be out of track? And it needs to be realistic. And at the end of the day, you need to have discipline. So again, those are the sort of key elements from my point of view, that go into a personal budget income expenses, debt repayment, savings, and making sure that you're aware of what your financial goals are. How do you you said at the time you don't have one. How do you actually go about it? 

Alec: [00:06:36] So I have a moment in time view of my money, I guess, and the way I think about everything in payment cycles. So I know. And so like you, I start with how much I get paid. Like you. I only think about my salary. Yeah. Any money that comes from dividends or anything like that, I reinvest I don't think about. So I take what I get paid every fortnight and then I have, you know, it going to different accounts. So I have, you know, I'm travelling a bit this year so I've got money going to a travel savings account, I've got money going to an emergency fund, I've got money being automatically transferred to an investment account. So all those auto transfers are set up for the day after I get paid. And with that there's a certain amount of money that goes to my spending account. And for me, the name of the game is to spend less than what I've allocated in my spending account in every two week period. 

Bryce: [00:07:35] Spend less than what you've allocated in your spending account. 

Alec: [00:07:38] Yeah. And if I do that, I know that my money is more than my money up. Yes. So all for me.

Bryce: [00:07:46] But your spending account is not your savings in those sorts. 

Alec: [00:07:49] No, no, no, not my investments. So all of that goes on medically in the two weeks. Yeah. So every two weeks when I get paid and then the name of the game for me, all I'm focussed on, I know that if I spend less, then I automatically transfer it to my spending account. Yeah, I'm good. Nice. And so like I know my bills and like I've got a rent account that my rent get gets automatically transferred. So everything just goes. Don't think about it. I've set it up and then I can just open my banking up, check my spending account and I'm like, Alright, this is how much I got to spend for the next two weeks. And by the end of the two weeks I'm like, Oh, I'll be tuner and rice for lunch. But that's for me that rather than like managing a spreadsheet and inputting all the numbers as I go every month or every week or anything like that, it's just moment in time. How long have I got until I get paid again? How much have we got to spend? And so if I have a blow-out weekend, then I'm going to be a little tight the next week. But it's like that's just the name of the game. 

Bryce: [00:08:49] Okay, well, I've got a couple of questions, but it probably falls into some of my takeaways for how I do mine. And I think we're very similar and actually how we approach this compared to some of the other budget templates that are out there. But let's take a quick break. And then on the other side, we're going to compare or have a discussion around the you're in good company budget template that is available in the Facebook group. You're in good company investing podcast discussion group. If you'd like to join and have a look at one that I use. So we'll be right back after this short break. All right. Well, welcome back where we are answering the question, what is a good budget template to use? One of the most common money questions. And then the young good company girls, they did an episode on this a couple of weeks ago. Yes. And shared one of their budget templates in their group. 

Alec: [00:09:31] Yeah. Free to download in their Facebook discussion group will include a link to the group in the show notes here. It's called YIGC Budget (Your financial friend). Because Maddy and Sophie didn't like the word budget. So you're the spreadsheet guys, so I wanted you. 

Bryce: [00:09:48] It's not a one size fits all. So the way that they have approached it is pretty comprehensive. They've taken a 12 month view where you can plug in a budget for every single month and track where your money is going, where your savings are going, how much you're in. You'll be investing each month, how much you'll have invested by the end of the year. They've got things like you can put in your side hustle income, you can manipulate your tax brackets. It's pretty comprehensive. The way they break it up is into chunks. So they start with income in. Then they say, well, what are our must spends? So, you know, that's things like rent and subscriptions and all those sorts of things. Then they have a look at what they call their fun fund and short term savings goals, then a saving an investment bracket plus debt repayments and then a leftovers. So they have 1 to 3, four or five, about six buckets in the spreadsheet. And you can go in and obviously manipulate those cells accordingly, depending on how much money is coming in and what your savings goals are. So I think overall it takes a lot of the boxes that we spoke about at the top income expenses, debt repayment, savings, and it gives you a total yearly view. 

Alec: [00:11:03] Yeah, you could you could build on this. You could do it how like away account at work, which is you have your projected which is what this is and then you have your actuals column and you say how you went based on what you set yourself. 

Bryce: [00:11:16] So that is one key takeaway for me. I don't do any tracking of actual expenses, if that makes. 

Alec: [00:11:23] Sense, but you just do projected and then. 

Bryce: [00:11:26] Will I know exactly what my expenses are going to be each week, a fortnight. 

Alec: [00:11:32] But what about variable ones like you don't know how much you're going to spend at the pub. 

Bryce: [00:11:35] Yeah. So I have similar to you my I pay what I call it, pay myself. Okay. And so I have a lot. I have a buffer that I give myself every fortnight that covers all of that. 

Alec: [00:11:48] Okay. So similar to what I do. Yeah, yeah, yeah. Okay. Interesting. 

Bryce: [00:11:52] Yeah. So the big takeaway for me here is the 12 month view. Great tracking, very comprehensive. And it's similar to one that we downloaded from. 

Alec: [00:11:59] Money with Matty. Money. No, no money with Katy. [00:12:01][2.0]

Bryce: [00:12:02] Money with Kate. Yeah. Yeah. That was very.

Alec: [00:12:04] From the US. 50 bucks. 

Bryce: [00:12:06] 50 bucks. Yeah.

Alec: [00:12:07] Yeah. That's the commitment we have to this, this episode. We bought it and downloaded it. It was a beast. 

Bryce: [00:12:14] Yes. To me. Too much. Too very. 

Alec: [00:12:17] Much. Sophie And Maddy's template is on one Excel tab. Yeah. Money with Katie's was on at least 12. That was like one for every month. And then I think there was a number of extras as well. Yeah, it was a lot going on. Yeah. 

Bryce: [00:12:31] Now I want to be clear here that I say it's too much now and it's overwhelming and it's comprehensive. But if I think about the journey that I've taken to get to where I am now, when I was at uni and when I was early on, I used to have tab after tab of tracking and bits and pieces and I feel. 

Alec: [00:12:47] Like you're like Benjamin Button like most people, most people at uni have no idea. And then as they get older they add more and more cups to their budgets. 

Bryce: [00:12:59] And I'll get to that in a moment. How about I go through what I've got, what I use, and then I'll give you some of my key takeaways that touches on that. So just like Maddie and Sophie, mine is a one page spreadsheet, but it's all it's only two columns. Well, there's a few more, but at most it's two columns and it's very similar to you. And I'm not looking at what's happening in January, February, March, April, May, June, July. It is a moment in time, cash flow management spreadsheet. And what I mean by that is similar to Ren. I just look at what is my income for the fortnight and then every number in there relates to my pay cycle. There's no point having numbers in there that are monthly if I'm getting paid fortnightly and vice versa. You want to know how everything relates to each other. So I have my income coming in and then I've got an expenses bucket which I call no questions asked. And this is how I think about the importance of payments. Income comes in now, no questions asked expenses, and that is broken into three accounts. I've got all of my like direct debit bills stuff which is rent, utilities, insurance, internet subscriptions and phone. Then I've got my second account, which is shared with my wife, and that is food, transport, gym memberships, those sorts of things. And then debt repayments. So I've got my NAB equity builder and paying off a MacBook Pro. So I have. Three buckets that are no questions asked. Expenses done. Then I have what I know is remaining. I then pay myself what am I going to need over a fortnight for things like ad hoc expenses, leisure, i.e. beers, gifts, those sorts of things. Once I pay myself that and this, I think this is the number that is the number that helps you stick to the rest of your budget. If you are too stringent on paying yourself, you are more likely to dip into your savings account. You are more likely to pull money from other parts of your management process, which at the end of the day, you know you're not going to hit your savings goals, you're not going to hit your investing goals. So be generous with paying yourself. The final bucket is then what I call building wealth and protection. And it has my emergency fund. It has what I call do not touch savings account, and that is just long term. It's got short term savings and all my investing is in there as well. And that is the only part that I track because I have the I set a goal at the start of the year. How much do I want to have saved in cash? How much do I want to be invested? I have a calculator in here that'll tell me what I need to put away every single pay cycle to achieve that. And you can have a look at that. Once you download that note, download the template, and then I just put that away each week. That's the only thing I track. And what this does, it really then allows me if someone comes in and says, Oh, you know, we want to go to Europe in X period of time or I need more money in my emergency account, you can easily manipulate these and adjust as you go. It gives you flexibility as you go. 

Alec: [00:15:56] Nice. Well, you're going to make that available. 

Bryce: [00:15:59] Absolutely. Yeah. 

Alec: [00:16:00] So we'll also include a link to that for our Facebook discussion group. Yeah, you're in good companies. Is in your companies group. Ours will be in our Facebook group. So make sure you join both of them and download both of the templates and then you can manipulate them and amalgamate them and make them your own. The question we set out to ask today is Where can I find a good budget template to use? Hopefully we've answered that with too well. Marion Services. Good years would just be okay. But I guess let's put a bow on this. Any closing thoughts on budgeting and managing cash flow in general? 

Bryce: [00:16:40] Yes. I mean, thinking about, as I said, how I've progressed over the years is that whatever you start with now is probably not going to be what you're doing in five years time. It's taken me a long time to feel comfortable with having this approach. But the biggest sort of lever to making sure that I'm disciplined and actually hitting this is the automation part and refining the numbers that you're shooting out to your bank accounts each week so that you know that you're covering yourself. As I said, the biggest driver for coming unstuck is not having enough in your spending account pay. If you're saying I can get away with 100 bucks a week and you know that you're going to spend 140, definitely pay yourself more because you're not going to be taking away from your savings accounts. 

Alec: [00:17:22] Yeah, well, Bryce, on that note, as we close out, when you get paid on Monday, we're recording this on a Thursday. Yes, I just had a look at my spending account. I have $64 left in there, so no Ubers. So. Yeah. 

Bryce: [00:17:36] That's all right. We'll put the corresponding links in the show notes for those budgets. Plenty of options there for you, but Ren that does bring us to the end. Please write in review. Get started investing. If you're enjoying what we're doing and taking value from it, we really appreciate it and it goes a long way to help others find us on the chart. So if you can spend 5 minutes on Apple just writing us and reviewing us, that would be appreciated. But then we'll pick it up next week.

Alec: [00:17:59] Yeah, give us a rating and tell us which budget template you thought was better. 

Bryce: [00:18:02] Yes.