Easy 50/30/20 Budget Template

In the realm of personal finance, managing one’s budget effectively is a crucial skill. The “Easy 50/30/20 Budget Template” in MS Excel offers a streamlined and practical approach to budgeting, designed to help users allocate their income efficiently. This article delves into the structure, features, and benefits of this template, providing a thorough understanding of how to utilize it for optimal financial planning.

Introduction to the 50/30/20 Budget Rule

Before diving into the specifics of the template, it’s essential to understand the 50/30/20 budget rule itself. This budgeting principle divides after-tax income into three categories:

• 50% for Needs: Essential expenses such as housing, utilities, groceries, transportation, insurance, and healthcare.
• 30% for Wants: Discretionary spending on non-essential items like dining out, entertainment, hobbies, and vacations.
• 20% for Savings and Debt Repayment: Contributions to savings accounts, retirement funds, and paying off debts.

This template includes three main worksheets and the first one consists of two main sections designed to help individuals allocate their finances according to the 50/30/20 budgeting rule, which typically divides income into needs (50%), wants (30%), and savings/debt repayment (20%). This template focuses on the “Needs” category.

1. Needs Expense Breakdown Table:
   • This section contains a detailed table listing various necessary expenses along with their budgeted (expected) and actual amounts, as well as the difference between the two.
   • The columns in the table are:
     • Items: The types of necessary expenses (e.g., Mortgage, Rent, Gas Bill, Electric Bill, Water Bill, etc.).
     • Expected Amount: The amount budgeted for each item.
     • Actual Amount: The amount spent on each item.
     • Difference: The difference between the expected amount and the actual amount spent.
   • The bottom row of the table shows the total for each column, providing a summary of expected, actual, and difference amounts for all the listed needs.
     • Total Expected Amount: $4,120.00
     • Total Actual Amount: $595.00
     • Total Difference: $3,525.00
2. Expected Amount Pie Chart:
   • Below the table, there is a pie chart that visually represents the distribution of the expected amounts across different need categories.
   • Each slice of the pie chart corresponds to a specific expense category, showing how much of the total expected amount is allocated to each need.
   • The legend to the right of the pie chart lists the categories (Mortgage, Rent, Gas Bill, Electric Bill, etc.), each associated with a color or pattern to match the corresponding slice on the chart.

The second worksheet focuses on the “Wants” category within the 50/30/20 budgeting rule. This template sheet helps track and manage spending on discretionary items. Here’s the detailed structure of the Excel worksheet.

Wants Expense Breakdown Table:

• This section contains a table listing various discretionary expenses with their budgeted (expected) and actual amounts, along with the difference between the two.
• The columns in the table are:
  • Items: Different discretionary spending categories (e.g., Subscriptions, Entertainment, Restaurants, Take Out, various Goals, and Other categories).
  • Expected Amount: The budgeted amount for each item.
  • Actual Amount: The actual amount spent on each item.
  • Difference: The difference between the expected and actual amounts, indicating whether the spending was over or under the budget.
• The bottom row of the table provides a total for each column, summarizing the overall expected, actual, and difference amounts for all listed wants:
  • Total Expected Amount: $3,420.00
  • Total Actual Amount: $895.00
  • Total Difference: $2,525.00

Expected Amount Pie Chart:

• Below the table, there is a pie chart that visually represents the distribution of the expected amounts across different discretionary categories.
• Each slice of the pie chart corresponds to a specific expense category, showing the proportion of the total expected amount allocated to each want.
• The legend to the right of the pie chart lists the categories (Subscriptions, Entertainment, Restaurants, Take, Goals, and Others), each with a specific color or pattern that matches the corresponding slice in the pie chart.

Similarly, the third worksheet comprises a saving breakdown table where you can add item details along with the expected and actual amount to get the variance. The bottom brown of this table will provide you the sum of the expected, actual, and difference total. However, at the bottom, the pie chart will help you understand the flow of your money in this 20% budgeting rule to make wise financial decisions.