Getting Started

How do I get started with Simple Budget? It is simple, but takes a little prep! Let’s do it…

The first step, if you haven’t already done so, you need to install Simple Budget. You can find Simple Budget at the Ubuntu Snap Store for Linux operating systems, or at GitHub for Windows operating systems.

A great way to see where you want to go, is to see where you have been. If you are unsure of how to start a budget, or what a budget even is, read through this entire section first. Here is my suggestion:
Read this entire page through first.
– Go through the section about finding what you have been spending and follow the instructions.
– Calculate your monthly income.
– Set up the Funds you need. (For more information on Funds, look HERE!)
– Set up an Account or Accounts as needed. (For more information on Accounts, look HERE!)
– Look at your current spending totals from your worksheet and find spending problems. Make decisions where you can adjust your spending and make a commitment to it.
– Enter your Income in your Budget. (For more information on adjusting Budget Amounts, look HERE!)
– Enter your Budget amounts for each Fund.
– Adjust so your Budget Balances.

Here we go!

Calculate what your total income is for the month. If you get paid every two weeks, take your weekly pay, multiply it by 26 for 26 paychecks a year, then divide that by 12. This is the average for each month. If you have a varying income, like one that might be affected by “commission salary”, you will have to make some decisions. You really need to set your budget up with the “Least Known Amount” you will be receiving. If over time, you find that your “commission salary” increases, you can bump up budgeted fund amounts if you need to. A wise thing to do is to keep a good buffer for those times that the commission will be less.

Here are some great resources to help you with tips and even personal help to manage your money. I have no connection with Compass, but believe in their mission:
Compass
Check out the Compass Map HERE for a road plan to financial freedom.
Spending Plan Spreadsheet from Compass that helps decide how much in each Fund.
Directions for the Compass Spending Plan Spreadsheet.

The next step is to create a “Budget”. Don’t be afraid of the word “Budget”. A Budget is simply a plan laid out to aid your spending decisions. A suggested way to create a budget, is to find out what you are actually spending your money on. This surprises many people. For me personally, when I did this, I found I was spending more on “eating out” than all other categories combined. Here is how you do it:

  • Get a copy of your bank statement or print out your bank transactions for the past month or two. Do at least one full month.
  • Find the “Sample-Budget-Funds-Worksheet.pdf” file and print it out. Simple Budget should have put a copy of it in the same folder as your budget files. The location of your files is shown on the main Simple Budget window when you start the program. You can also download a copy of the worksheet HERE!
  • Print out the worksheet form.
  • Next to each category, the worksheet has letters, A, B, C, etc. Go through your bank statement or transaction list from your bank and put the appropriate letter next to each transaction.
  • Add up each group, all the A’s, all the B’s etc.
  • Put the totals of each group on your worksheet. If you totaled up your groups (funds) for two months, make a note of that, as you will have to divide the results by 2 to find what you spend per month on average. This will give you an idea of how much you are actually spending on each category. See the example portions of a bank statement and a worksheet below.
A Sample Bank Statement Categorized According to the “Sample-Budeget-Funds-Worksheet.pdf”.
Download Sample-Budget-Funds-Worksheet.pdf

As you have already seen in the worksheet you have been working with, you will need to divide your spending into separate funds. Funds are things like: Auto-Gas, Auto-Maint, Housing-Electricity, Housing-Rent, Phone, Gifts, Entertainment, etc. Simple Budget automatically stores your information in a file named “CURRENT.SB”. You probably don’t need all the different funds listed in your worksheet, and some might be able to be combined into one fund. Included with Simple Budget are two files called “Sample-many-funds.SB” and “Sample-fewer-funds.SB” that you can use and then save as CURRENT.SB. Find them by clicking the File menu and the Open sub-menu. If you use one of these sample files, Simple Budget will notify you that you can use is and modify it all you want. Then, when you close Simple Budget, it will ask you if you want to use the sample file as your real budget file. If you do, Simple Budget will save it with the name “CURRENT.SB”. Be aware that if you currently have a budget set up, it WILL BE WRITTEN OVER! To learn more about creating, changing, or deleting Funds, see HERE!

You will need to have at least one “Account”. This can be named the same as your actual bank account. For example, you might name one “First Bank – Checking”. Then, if you have more than one account, you might name one “Security Bank – Saving”. You can name them anything you like, for example “First Bank – future purchases”. To learn more about creating, changing, or deleting Accounts, see HERE!

Under the “Budget” menu, select “Funds” and create or modify any fund that you may need. Create Income funds (by checking the “Income Fund” check box), for your income categories, like “Pay Check” or “Salary – John”.

Create “Accounts” under the “Budget” menu and “Accounts” sub menu.

Now that Fund and Accounts are created, it is time to set the “Budget”. Under the “Budget” menu select the “Budget Amounts” sub menu. Start by entering your “Monthly” income funds (Your total projected income for the month). This is the maximum that you can spend in the month. That is the idea of having a budget, to manage your spending.

At the bottom of the page, it will say that the budget is “Not Balanced” and show how much is available for all the funds. The purpose of Simple Budget is to help you manage your spending and will not let you set up budget amounts that total more than your income for the month. Go to your worksheet that you have already filled out with your actual spending. Add up the total that you spent. If that amount is more than your calculated income, you need to make some decisions as to where you can cut your expenses. As I mentioned before, for me, the big money waster was in the “Eating Out” category.

Again, here are some great resources to help you with tips and even personal help to manage your money. I have no connection with Compass, but believe in their mission:
Compass
Check out the Compass Map HERE for a road plan to financial freedom.
Spending Plan Spreadsheet from Compass that helps decide how much in each Fund.
Directions for the Compass Spending Plan Spreadsheet.

As you start entering each fund’s budget, the amount will change to show how much is left. You may have to compromise on “unnecessary” funds and “tighten your belt” as you live within your means. Once all the budgets are entered, you will have to “fudge” a fund or two to get the budget exactly “Balanced”. It MUST be balanced or you will not be able to enter transactions. In my personal budget, I created a fund called “Z-Unallocated” for the amount left that I didn’t need to budget for. I began it with a “Z” so it will be sorted at the bottom of the list. If you create such a fund, you can then use the money in that fund to put into savings, or reduce debt, or for a special project.

Go to the “View” menu and select the “View Budget Amounts” sub menu. Notice that it shows the balance of each fund. The balance of each “Expense” fund is shown as a positive number and as you spend, the mount decreases. And, notice that it says that your “Income” fund(s) is negative. As you add money into an Income fund, the fund becomes less negative until it is full. The funds are set, but you have no income in the system to spend. Repeated from the “Overview Page“:

Cash / Budget Relationship: 

Both are needed to release cash from an account.  The account holds the cash and the budget gives you permission to spend it.  BOTH are required.  You can not spend cash permitted by a budget if your account does not have the cash.  You can not spend the cash in your account if your budget does not give you permission to spend it.

I suggest you wait to start your new budget until the first of the month. On the first of the month, find out from your bank or bank app how much you actually have in your account. This can be your beginning balance. ***NOTE*** Be aware that the bank balance might not be your true balance if there are some outstanding transactions. Those are transactions that you have made but are not reflected in the banks statement yet. If you have been operating with the notion that the bank app tells you how much money you have to spend, Simple Budget will help break that myth.

This is how I suggest you start your budget. It takes a few minutes to set up, but then you will be on your way:
– As you noticed, your budget has no “cash” for spending. Go to the “Transaction” menu and select the “Transactions/Transfers” sub menu.
– Here you can enter your initial deposit. I suggest you divide your current “Beginning Balance” among your funds. Take the balance your bank says you have in your account, and split it up among the funds. Remember that you only have the amount in your account to start with. If you need to, apply more to the funds that you know you will have to spend from sooner. You may not have enough in your account for all the funds until you get another paycheck.
– This is how you enter your initial balances into Simple Budget. It might seem a little complicated here, but keep going. For more information on entering “Transactions and Transfers, look HERE! Refer to the “Transactions” screenshot below.
* Do the numbered instructions only once:
1) Click the “Income/Credit” Radio Button. The label in the middle left of the screen should now say “Income Transaction”.
2) Enter the correct date. Most likely today. Click the down arrow for a drop-down calendar.
3) UNclick the “Save New Payees” checkbox if it is checked (NO check-mark in the box).
4) Double click the “Payee” area of the “Grid” and enter something like “Initial Balance”.
5) Select the bank account your initial balance is in. If you have balances in more than one account, you will have to repeat this whole process for each account.
6) You probably don’t need a note here.
Okay, all that only needs to be done once. Next, you will be selecting the amounts and the funds you want to put the money into.

Do this next section for EACH fund. You will be entering a big “Split Transaction”. See the “Transactions and Transfers” page for more information of what you are doing here.
A) Enter the amount you want to put into the fund.
B) Select the Fund you want the amount to go into.
C) If you have more funds to enter amounts in, click “Add Row”.
– Repeat A, B, and C until you have no more funds to enter with the amounts from the current bank account you are dealing with. Do not do “C” after the last one entered. Notice that the “Transaction Total:” is updated for each row you enter. The final amount of your transaction should equal your bank balance for the selected account.
– When all the funds are listed that you are entering amounts for, click “Enter Transaction”.
– If you have funds in another Bank Account, do all the above again for the next account (1 through 6, and A, B, and C as instructed above).

You are now set to keep track of all your transactions from this time forward. As you make purchases and receive income, enter the transactions into the appropriate funds and accounts. Go to the “View” menu and select “View Fund Balances” to see how you are doing through the month. ***NOTE*** Remember, that even though Simple Budget might say you have money in a fund, if there is no money in the account, you can’t spend it. As you deposit you income, that money will become available to use in your budget. The following paragraph is repeated from above, but worth mentioning again:

Cash / Budget Relationship: 

Both are needed to release cash from an account.  The account holds the cash and the budget gives you permission to spend it.  BOTH are required.  You can not spend cash permitted by a budget if your account does not have the cash.  You can not spend the cash in your account if your budget does not give you permission to spend it.

Simple Budget always uses the file “CURRENT.SB” as its normal data file. The data file is automatically saved every time Simple Budget is closed. If you plan on leaving the program open for an extended period of time, you can save the data file by selecting “Save” under the “File” menu. Other month’s budget files can be opened through the “File” menu, but the next time Simple Budget opens, it will search for and open “CURRENT.SB”. If it does not exist, CURRENT.SB will be created with a blank budget.

Learn about Funds HERE.