We created a simple template for Google Sheets based on the 50/30/20 budget to help you quickly see what you can afford to spend and save in the months ahead.
It’s a tool to generate a Personal Finance Snapshot. (And yes, we almost called it a personal finance selfie. Sorry.)
This tool provides a simple overview of your numbers: guidelines for what you should safely spend, how long it could take you to eliminate debt, what you should have in emergency savings, and your financial net worth.
Use it as a prompt as you consider your numbers for the year ahead.
Even if you track every dime and budget every penny, it’s often helpful to zoom out and see your big financial picture.
The Personal Finance Snapshot spreadsheet was inspired by the idea that the rules of personal finance can fit on the back of an index card.
It was also inspired by the brilliant One Page Financial Plan from Carl Richards.
Since it’s a spreadsheet, it’s super customizable.
This tool uses very simple Google Spreadsheet formulas to estimate what you can afford and what you should have in savings. Since it’s a spreadsheet, it’s very easy to change to suit your needs. If you make something cool with it, let us know!
Start with a simple 50/30/20 budget.
“Budgeting forces us to face the reality of how we spend. It allows us the opportunity to see the gap between what we say is important to us and how we spend our money.” – Carl Richards
Even if you don’t intend to follow one, making a simple budget reveals what’s possible with your money.
The 50/30/20 system is one of the best ways to do this. Simply add up your total annual income after taxes and divide it by 50%, 30%, and 20%.
- 50% goes to NEEDS: core living expenses – rent, mortgage, groceries, bills, transportation, insurance.
- 30% goes to WANTS: entertainment, eating out, certain subscriptions, fun stuff!
- 20% goes to FREEDOM: eliminating debts and saving for emergencies and then retirement.
It’s this simple: if you make $50,000 after taxes, you have:
- $25,000/year or $2083/month for needs
- $15,000/year or $1250/month for wants
- $10,000/year or $833 to pay off debt or save for retirement and emergencies.
Read more: 50-30-20 Budgeting Method
See how fast you can eliminate debt or save money.
The Financial Snapshot uses the basic numbers in your 50/30/20 budget to model different scenarios for how you might save money or pay off debt.
Assuming (unrealistically) that you would apply your entire 20% savings allocation to one big goal at a time, the tool shows you:
- How long it would take to fully fund an emergency account following the standard recommendation of putting away three months salary in a safe, high-interest savings account.
- How long it would take to eliminate all your credit card debt.
- How long it would take to fully pay off all outstanding loans, including student loans and mortgages.
The tool also provides a very rough estimate of your net worth.
Of course, real life rarely cooperates with simple guidelines.
The 50/30/20 budget and the simple rules-of-thumb in the Financial Snapshot won’t work for everyone. In the real world, you have to juggle and prioritize wants and needs.
So you might decide to save a more but also carry debt a bit longer. Or you might decide it’s worth it to spend more than 50% on living expenses.
Hopefully, the snapshot provides a view of what’s possible.