How to Budget

January 2, 2021

How to Use a Budget Calendar to Organise Your Finances

By Priya

January 2, 2021

Whenever I'm rolling over my budget for a new month, I always create a new budget calendar. It's a visual representation of when expenses are due and when I'm getting paid, which is a great way to organise my finances.

In fact, my budget calendar is often the first step in my budgeting routine. It's a simple but powerful tool that allows me to look ahead and see my cashflow throughout the month. 

If used correctly, your budget calendar will do a lot more than just show you when your bills are due and when you're getting paid. It'll help you break the paycheque to paycheque cycle by ensuring you always have enough to pay your expenses. That, my friend, is pretty powerful stuff. 

What is a budget calendar?

Your budget calendar is just a monthly view calendar that shows all your expenses and income on it. Super complicated, right? Take a look at the example below.

It shows all upcoming expenses, paydays and events/appointments that will require an expense. It looks just like a regular monthly calendar, but it includes a lot of valuable information for organising and managing your finances. 

By the end of this blog post, you're going to know all about budget calendars, why they're important and how to create one. Because a budget calendar is so important, I've created a printable 12-month calendar workbook for you to download and complete as you go through this blog post.

Don't worry if you make a mistake - you can just print off another one and try again! 

Why do I need a budget calendar?

I strongly believe that everyone needs a budget, regardless of what their finances look like. And a budget calendar is one of the most important steps in creating your budget.

In fact, if you're trying to break the cycle of living paycheque to paycheque, you need a budget calendar more than anyone. For something so simple, it has so many benefits for your finances.

  • a budget calendar shows you your income and expenses relative to each other;
  • it shows you expenses that will be due between your paycheques;
  • helps you eliminate costly surprises or events that have a tendency to "sneak up" on you;
  • keeps you focused on what's coming up and when to pay your bills;
  • helps you avoid overdraft fees because you can see, at a glance, how much money you'll need throughout the month;
  • know which income source is used to pay each expense.
  • You'll notice that a lot of these benefits relate to the timing of earning and spending money throughout the month. That's not by accident. When you know exactly when and how much you're earning and spending, you can start to break the paycheque to paycheque cycle.

    I'm not living paycheque to paycheque, but I still rely on my budget calendar every month. It shows me how much of my income will be used for expenses each month. I can then safely transfer the rest of my income to my savings or my investments, knowing that my expenses will be taken care of.

    How to create a budget calendar

    Download and print your free printable 12-month budget calendar workbook. It's un-dated so you can start at any time and keep using it all year long. Remember to date your calendar before getting started, or nothing will make sense! (been there, done that!). Use pencil the first time you do this.

    Throughout this process, I want you to keep something in mind: your goal here is to be as realistic and comprehensive as you possibly can. It's better to capture everything you can think of on your calendar than to leave things out.

    The first step in creating your budget calendar is to add in your income. For each of your paycheques, enter in the minimum amount you’re guaranteed to receive on the day it’s expected to hit your bank account.There are two very important things to remember here about the income you enter on your calendar: 

    1. Only enter the minimum amount of income you will receive in your bank account. That means your income after tax and any retirement contributions or other payments that are taken out of your paycheque before you receive it. Further, if your income fluctuates (for example if you work for commissions or an hourly wage), only enter the income you’re guaranteed to receive.
    2. Enter your income on the date you’ll receive it in your bank account, not the date your employer will pay it. Otherwise, you won’t actually receive your money on time which means there are some expenses you won’t be able to pay. You’ll have too much month left at the end of your money.

    Example: enter your minimum guaranteed income on the date it’ll be in your bank account

    Betty is guaranteed to receive two paycheques this month because she’s paid fortnightly. She’ll receive $2,000 after tax and other mandatory deductions on the 6th and the 20th. She only has one income stream which is from her full time job. However, if you have multiple income streams, record all of them on your calendar.

    Know your expenses

    The next step is to add your expenses on the date the payments will be made. Keep in mind, this is not necessarily when they’re due. I pay my bills a couple of days early so that the payment clears by the due date. Therefore, I enter my expenses on the date they will be paid, not the date they’re due. This is how I make sure I’ll have enough in my bank account to pay the bill.

    Here are the kinds of expenses you should be including in your budget calendar:

    • all monthly bills including debt payments (whether they are a fixed amount like rent or a varying amount like utilities);
    • any other infrequent bills that will be due during the month (for example quarterly bills);
    • specific contributions you’ll be making to savings or investment accounts;
    • variable expenses that recur on the same days each month (for example weekly groceries and petrol).

    Example: entering expenses into your budget calendar

    On her budget calendar, Betty includes all her regular monthly bills like rent, insurance and credit card debt payments. She also has her quarterly utility bill shown on the day she’ll make the payment. Further, you can see her savings contribution of $500 on the 7th as well as recurring variable expenses like groceries and fuel.

    Betty pays her bills one day before they’re due, so she’s entered her bill payments on the day she’ll make the payment not the actual due date of the bill. This is because the date she makes the payment is when her bank will deduct the money from her bank account balance. Therefore, the money is spent once she makes the payment even if the bill hasn’t come due just yet.

    Plan ahead for appointments & events

    Next, enter in any appointments or events occurring throughout the month that will require some money. This includes things like:

    • medical appointments;
    • refilling prescriptions ;
    • birthdays & anniversaries;
    • travel;
    • salon appointments;
    • girls’ nights & date nights.

    Enter the expected amount for each of your appointments and events on the date you’ll likely spend the money. Keep in mind that this is not necessarily the date of your appointment or event. For example, you’re attending a birthday party on Saturday night but you’ll buy the present after work on Wednesday.

    The money is being spent on Wednesday even though the party is on Saturday. Therefore, while you’ll enter the actual party into your calendar for Saturday, you’ll enter the budget for the present on Wednesday. 

    Example: enter expected expenses for appointments and events on the date you’ll spend the money

    Betty has a hair appointment, a monthly date night with her husband and her sisters’ birthday party. All these events will require some expenses. She’ll incur the expense for her hair appointment and date night at the time of the event. 

    On the other hand, the birthday party is on Saturday 15th. However, Betty likes to be prepared, so she’ll be shopping for a present on the 11th. As a result, she’ll be spending money before the actual party.

    Colour coding

    We’ve reached the last step in creating your budget calendar! It’s time to whip out your coloured highlighters because we’re going to do some colour coding. I love colour coding. It’s a great way for me to see what’s going on at a glance and also makes budgeting more fun and colourful. That’s why I included highlighters on my list of 7 must-have items that make budgeting fun and easy.

    This is probably the most difficult but most important step of the entire process. The goal is to determine which bills and expenses get paid from each paycheque. You’re essentially tracking your expenses in advance.

    You can see if there are expenses that are due before you get paid and which expenses will need to be paid with multiple paycheques. It’s super important that you don’t skip this step. It isn’t just for fun – you’re actually going to be using the colour coding to read and understand your budget calendar.

    Let’s go back to our example to see how this works. 

    Example: colour coding your budget calendar

    First, highlight each of your paycheques in a different colour. Betty gets paid fortnightly, so she’ll receive two paycheques this month. Each of these paycheques has been highlighted in a different colour – pink and blue.

    Next, take a look at her expenses. Because she knows when her expenses are due, she can see which paycheque to use to pay them. That’s why we’re creating a budget calendar – you can see your expenses relative to when you earn income. 

    Betty will be paid on the 6th. All the expenses that occur before her next paycheque will be paid with the money she receives on the 6th. Therefore, those expenses are highlighted in pink (to match the paycheque on the 6th).

    The half payment method

    This is the same for all the expenses that occur after she’s paid on the 20th – with one exception. Betty can’t cover her entire rent payment with her paycheque on the 20th. She needs to contribute money towards her rent expense from both her paycheque on the 6th and the 20th. 

    You can see that her rent amount of $1,600 is split into two amounts paid on the same day. She’ll make only one payment to her landlord, but the money will come from two different paycheques: $430 from her pink paycheque on the 6th and $1,170 from her blue paycheque on the 20th. 

    There are two additional things I want you to take away from Betty’s budget calendar:

    1. The birthday party on the 15th isn’t highlighted because the party itself won’t require any expenses. She’s buying the birthday present in advance.
    2. Her insurance bill is paid before she receives her first paycheque of the month. That means it’ll be paid using her last paycheque from the previous month.

    Maintaining your budget calendar

    You should always think of your budget calendar as a living document. Whenever you learn new information, you should be updating your budget calendar. That also means you can update your calendar for future months right now. 

    Yes, I know things change. So, if the idea of writing something in your calendar now only to white it out in 3 weeks stress you out, then don’t worry. I use my Google calendar as a draft version of my budget calendar. It’s free to use and will save you time worrying about making mistakes on your budget calendar printable. 

    I have all the information for my budget calendar for the next few months entered into my Google calendar. When it’s time to create my budget calendar each month, I refer to my Google calendar to make sure I’ve included everything. Then, I continue updating my budget calendar throughout the month – this is both for the current month and future months.

    A budget calendar is a simple but powerful tool to organise your finances. It’ll help you break the paycheque to paycheque cycle by ensuring you always have enough to pay your expenses. Download your free printable budget calendar worksheet and follow the steps and examples above to create your own budget calendar.

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