How to Build a Budget in Notion in an Hour or Less
The budget is the absolute foundation of your financial life; if you aren’t actively deciding where your money should go each paycheck, then odds are you aren’t totally optimizing your income and expenses. The human brain is great at having ideas - like spontaneous target trips and a quick lunch out - but not so great at considering long-term goals at every moment of everyday.
Take the decision making out of your day-to-day with a budget. I use Notion because I am already using it daily to organize my life and work, so it’s constantly visible. If a paper planner or Excel sheet on your desktop is easier for you, feel free to adapt this for any system that works for you. There are tons of apps and systems out there, but if you want something free and easy, consider downloading my done-for-you Notion template and following this guide to tailor it for yourself.
Step One: Get the Template
Enter your email address here and get the template link delivered instantly to your inbox. It takes seconds, and I’ll never sell your info - just send you monthly newsletters with finance tips, side hustle news, and seasonal reminders for tuning up your financial systems over the year.
If you don’t want to use Notion, pull up an Excel spreadsheet, get out out your planner, or find another tool that works better for you. My best advice here is to adapt something you already use - don’t start from scratch if you don’t have to!
Step Two: Add up your Monthly Income
Whether you’re working a standard 9 to 5 or freelancing, pull up your past two to three months of paychecks. If your income is stable, you may not even need that many - figure out your average income and set that number aside for later.
If you have less regular hours or income, take the average of the most recent three months and use that number. If you know that things are going to be different in the coming year - maybe you’re taking maternity leave or getting a raise - incorporate those changes into your average.
This template is based on a zero-dollar budget, where you assign every single dollar to a goal or expense. This income number is now your target; all of the expenses we add in the next step will add up to this number.
To get your percentages working right, go ahead and edit the formula in the column labelled “Percent of Total.” Replace the number in the template (currently $2430) with your income number. I find that monthly income is most intuitive, but you could also use one paycheck (two weeks) or annual income, if you wanted to.
Step Three: List your Expenses
Write in all of your expense categories with the name, amount, and due date. Be sure to capture everything - use your credit card statements if you want to make sure you’re capturing it all. I also find it helpful to tag things that are needs and wants separately, especially in the early stages where you are still working out how to stretch your income.
This should be pretty straightforward, but seeing where all your money goes on paper can be a bit jarring sometimes. Be kind to yourself when looking at past spending; a budget is just a tool to do better. Don’t let the weight of past mistakes stop you from making sure you’ve got your financial situation figured out next month.
I have a full list of basic categories in the template for you, but here are a few more that are easy to forget: pet expenses, perscriptions, gas for your car, credit card debt payment, retirement contributions, extra mortgage payments… the list goes on and on!
Step Four: Align your Expenses and Current Income
If your expenses are lower than your income, then you’re already in good shape. Edit your savings to capture any leftover income and you’re good to go.
If you are over budget or you aren’t able to save/invest as much as you’d like, start looking for ways to cut back.
Start first with your needs; make sure you’re paying as little as possible on these without risking your health or wellbeing. Then shift to looking at some of your wants and evaluating what is actually the most important. Some quick wins might come from these categories:
Car Insurance: When is the last time you called around for quotes to make sure you weren’t overpaying? Try that and see if you can scrape a little off.
Utilities: Can you adjust the temperature up in the summer and down in the winter? Turn off lights? Use the dishwasher more efficiently?
Subscriptions: If you haven’t used Hulu or Netflix in over a month, it’s time for them to go. I sometimes rotate things in for a month or two and then cancel, just to keep things fresh.
Groceries: Arguably one of the most flexible categories, saving money on food can look like cutting red meat, shopping seasonal veggies, or couponing. Sometimes, increasing your grocery budget to avoid takeout is actually the best answer to reducing spending on food!
If you’re looking at your numbers and finding that you’re far from making your goals, you can consider some more significant changes to your expenses:
Rent/Mortgage: Can you find a cheaper place when your lease is up? Should you add a roommate? Downsize to a smaller home? Move in with your family temporarily?
Car Payment: Can you sell your car and use a second/older car? Can you share with a spouse? Can you sell back your splurge dream car for a cheaper used model?
Student Loans: Are you eligible for any reduced payment programs or loan forgiveness? Beware of scams when you are searching for this kind of info - you never need to pay anyone to apply for PSLF or similar programs. Start with the federal website or your own loan servicer.
Step Five: Consider Your Income
Once you settle on your spending and goals, you can consider pacing. Whatever your savings goals are, you could always reach them faster if you wanted. Consider carefully how much work you are willing to add to your schedule, and choose your side hustle wisely. If you aren’t willing to work more hours, consider revamping your resume and going after higher paying jobs. In fact, if you do nothing else, research your current salary and find out if you’re underpaid. Plan to bring up your research in the next annual review you have - the worst a company can do is say no.
I once did an exercise where I wrote out a “dream budget,” allowing for increased spending, larger monthly investments, and rent for a place closer to the city. This helped me figure out the income I would need to increase my quality of life and retire earlier, giving me a goal to go after while job hunting.
Add the most relevant tasks to the “Financial Goals for 2023” section and your “Monthly Tasks” section as needed.
Step Six: Stick to It
You may still have more things to do, but once you’ve got your expenses and savings goals on paper, you have to start living them out in your day-to-day life. Set a date each month to review your spending and recalibrate as-needed. You may not get it all right the first month; keep adjusting and working towards your goals slowly. Over time, it will become second nature.
x Rin
