Household budget template: how to make a budget

The structure of a budget in brief

According to Takuusäätiö's guidance, a budget is built in four steps: record the month's income, list fixed expenses, subtract them from income and set aside an amount for savings, and divide the rest among variable expenses such as food and leisure. Finally, monitor actual spending and adjust the budget.

Marttaliitto advises estimating income cautiously and entering savings in the budget as a separate line. The easiest way to get the starting figures for income and expenses is from online bank transactions over a few months.

A budget can be made with spreadsheet software, an app or, according to the Takuusäätiö foundation, just as well with pen and paper. You can choose the period by your own rhythm at day, week or month level, and the budget should be reviewed whenever your life situation changes.

Expense categories of the budget template

The following breakdown is based on guidance from Martat and the Takuusäätiö. You can copy the categories into your own spreadsheet or notebook.

Income: net salary, benefits, pension, side income
Housing: rent or maintenance charge and loan repayment, water, electricity, home insurance
Fixed monthly fees: phone, internet, streaming services, regular medication, banking services
Food: grocery shop and restaurants on their own rows
Transport: public transport, fuel, car costs
Other: clothing, hygiene, hobbies, children's expenses
Bills that recur less often, divided across months
Savings: buffer and target savings

Invoice example: a household of two adults

The following example has been made up to illustrate how to use the template. The figures are not averages or recommendations, so replace them with your own.

Example (fictional)

Total income 4,000 €/month (net salaries)

Housing 1 300 € (rent 1 150 €, electricity and water 100 €, home insurance 50 €)

Fixed monthly fees €150

Food 750 €

Mobility €250

Other expenses 500 €

Bills that recur less often: 150 € (e.g. 1 800 € a year / 12)

Savings 400 €

Expenses and savings total 3 500 €, 500 € left unused

Track actual results and update the template

A budget is a plan, and only the outturn shows whether it held. Marttaliitto advises tracking spending daily or weekly using receipts or online banking and checking at the end of the month whether the account is in the black or the red. At the end of the year it is worth making a summary that shows where the most money went.

In the example calculation, 500 euros was left unused. The surplus can be moved to savings or used to pay down debt, but first it is worth checking that no less frequently recurring bill was left out of the base. If you use rules of thumb such as the 50/30/20 split, adapt them to your own situation, since, for example, the share of housing costs varies greatly by locality.

Irregular expenses and buffer

Many budgets collapse because of bills that come less often than once a month, such as insurance, the electricity bill or car servicing. Martat (the Martha Organisation) advises dividing such a bill across the budget months and setting the money aside in advance so the bill does not come as a surprise.

It is worth moving savings to a separate account right on payday. Part of it can be a buffer for a rainy day and part target savings, for example for a holiday. Money Radar's buffer fund guide explains in more detail how to estimate the size of the buffer.

If your expenses exceed your income

If the budget goes into the red, Marttaliitto advises looking for savings rather than covering the shortfall with payday loans, because borrowing becomes expensive. According to the Guarantee Foundation, in a tight situation essential expenses such as housing, food and medicines are paid before debts.

A monthly budget can be divided into weekly or daily amounts, making it easier to see how much money is still available. If bills pile up, the financial and debt advice of the legal aid offices is free of charge, and the Takuusäätiö foundation offers advice by phone and chat.

Ready-made templates and calculators

Marttaliitto offers a free Excel budget template with a budget, monthly bookkeeping and an automatically updating annual summary. Takuusäätiö has an online budget calculator and a reference budget calculator, with which you can compare your own expenses against reference budgets for reasonable consumption, as well as the free Penno app. With Money Radar's calculators you can also check how inflation and interest rates affect your own budget.

Frequently asked questions

Where do I start when making a budget?

First record the month's net income and fixed expenses from your online bank transactions. Subtract expenses from income, set aside a savings amount and divide the rest among variable expenses.

Is a budget template available free of charge?

Yes. The Martha Organisation (Marttaliitto) has a free Excel budget template, and the Guarantee Foundation (Takuusäätiö) has an online budget calculator and the Penno app.

How do I budget for annual bills?

Divide the annual sum by twelve and set this share aside every month, so the money is ready on the invoice due date.

Money Radar brings together the topic's figures, deadlines and services. Open Money Radar →

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Sources

The article is general information and does not replace the guidance of an authority, a lawyer or an adviser. Check up-to-date information from the sources.

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