When Is the Best Time to Start A Budget?

When is the Best Time to Start a Budget?  Sometimes users think they need to wait for 2015, since it's nearly May of 2014 already, and the yearly budget needs to begin with January 1, right?

Nothing could be further from the truth.  People who want to begin budgeting effectively can do so anytime.  How could you do it with our Pagemonth Home Budget, available free in Excel or Works at the bottom of our Pagemonth.com homepage?

Start today if you want, and go forward from now!  You will need to enter your income and expenses that you anticipate you will have, as part of the Setup of your budget on your folder's template file.  Follow the insstruction guidelines on our Setup and Help pages, and after you frame your workspace, enter your Income, Regular Expenses, and any Other Expenses you know you will have through the remaining months, budgeting rough estimates for vacations, gifts, education costs and other seasonal expenses you're fairly sure you need to plan for.

If you wish you can also plug in credit use in the Credit Charges rows for months you know you will rely heavily on Credit such as holiday gift buying, and don't worry about being specific.  Just allot an amount overall based on past experience, then plug the amount in to item 111, your main credit card Regular Expense, for payment the following month.  Try to pay it all if you can so you don't accrue any interest.  If you absolutely cannot budget to pay it all off at once, break it in half or thirds over the next two months after that, but pay it all as soon as you can.  When you see what you are being charged in interest for any balance you carry more than 30 days, it will remind you of the need for total payoff.  Don't worry that a payoff will hurt your credit rating, because it won't.

So begin in the present, first by setting up your remaining months budget projections.  For the month you begin, your balance will of course need to be entered for the beginning of that month since there will be no accurate balance automatically carried over from the end of the previous month. 

Enter that beginning balance manually in J192 if you're starting in April, and take it from your checking account balance after the last entry for March.  If it is off, use your bank website's online access or balance statements to help you refine that number.  And remember you can readjust it any time. 

Once you begin replacing your projected budget numbers with each day's actual numbers, entering each item of income and expense when it occurs, you won''t need to manually enter any other month's beginning balance anymore.  It will be automatically carried over from the previous month's end balance.

Your budget should be accurate if you follow our guidelines, but of course it will not include this year's January, February, or March numbers, so your budget will only show April-December totals and averages, unless you want to go back through your check registers and find your balance on January 1, enter it manually in cell J3, then gradually rebuild your January, February, and March budget based on actual expenses, charges, and income. (The previous months' charges you can get from your credit card statements.)

If you do that, you should be able to replace the beginning balance for April you manually entered iin J192 with "=D187" (March's End Balance).and be caught up as though you had begun your 2014 budget on January 1.

That would have the added advantages of several months' actual numbers you could review or print out anytime, an accurate updating of your central projection totals for all months and categories in columns E and F. a quick sense of where you're headed in the end balances of all months of 2014, also to the nearest dollar, at the bottom of columns E and F, and increasingly accurate totals and averages through the rest of this year.  You  will find that data very helpful for reviewing, for setting up next year's 2015 budget, and for tax preparation next April.

Each year's budget begins with unknowns, projects estimates as information becomes available, and ends with known, solid figures.  It's a matter of replacing the unknown with the known, basically, all year.  If you set it up and maintain it properly, it will really help you manage your personal finances, and validate the idea that the best time to start a budget is as soon as you're ready, willing, and able.  At Pagemonth we'll always be glad to help when you have questions or need assistance.