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Reduce your Expenses with a Budget to Reach Financial Independence!

If you want to attain financial independence or simply to cut down your expenses, a budget is always useful. The goal is to get as much fun as possible out of every dollar you earn!

Create a Budget

Creating a budget is most probably the best way to take control of your finances rather than them controlling you! A budget will tell you exactly where your money goes and when. It might seem easy but keeping your budget up to date requires a good dose of dedication.

Tools to help you!

Personally, I’m using the Google Sheets annual budget template as a budgeting tool. It’s simple, easy to use, free and easy to setup and get started. It also offers graphical representation of your earnings and expenses. Here is how it can be used:

The start sheet offers the possibility to enter a basic amount for the current year.

Budget Setup

The second sheets shows your expenses and is divided into categories. You can add a few elements at the end as well if you don’t find the type you like for a specific expense. Write the total of each month in the appropriate cell like displayed below.

Budget Category

Each category works in the same way.

  • In cyan : months and total for each one.
  • In purple : types of expenses of the category.
  • In green : the place where you enter every expense for each month.

On the right corner you can see the total and the average for each type of expense for the year. The categories offered by Google Sheet annual budget template are pretty diversified, in other words it should cover all your expenses.

The income sheet works like the expense sheet, once you have filled all the information we’re now heading to the interesting section! That is, the Summary sheet. This one is dynamic and gives you the total of each category as well as two graphs showing your income and expenses as well as the hottest categories.

Budget Summary Income

Budget Summary Expenses

As you can see, if I was the owner of this budget I would most probably assess the transportation category as it seems really problematic compared to the others.

Other tools?

Other tools exist online to help you create a budget. Here is a few of them:

Why I am using Google Sheets instead of an application?

  • It’s free! (big plus honestly)
  • It’s excel and easy to edit. I can also add new sheets to create graphics and the like.
  • Fits on my cell phone with the Google Sheets application!
  • I like it, ok I admit this is not the best argument but whatever!

You can use an application or Google Sheets as it suits you and honestly an application might save you a bit of time if you link it with your bank account.


Considering the total of each categories shown above.

Categories Analysis

If I target the transportation category, I can probably reduce this category in some way. Maybe by taking the bus instead of driving (saving gas) or biking to work. Else I can probably downsize to a smaller/cheaper car. The exercise is to find the perfect match between what you own and your needs. This can save you a bunch of money!

The two other categories that seem worth considering are Everyday and Utilities.


Everyday means grocery, clothing and restaurant. Restaurant might be easy to reduce but you want to consider what kind of person you are as well. If you like going to a restaurant with your girlfriend/boyfriend once or twice a week because that gives you time with each other, by all means don’t reduce this category. You might want to concentrate on clothing instead especially if your closet is already full and you use only half of what’s in there!


This category includes the phone, Internet, TV and heating. Saving on electricity can be easy. Wash your clothes with cold water, make sure the lights are off when you leave your house. Replace light bulbs by LED bulbs. Buy electronic thermostats and reduce the temperature during the day and the night or at times when there is no one in the house. Cut the TV because it’s nothing but commercials that try to have you buy more of what you don’t need. Reduce your internet speed and assess your phone contract to make sure that if you use 300MB per month you don’t have that 6GB plan that cost an arm and a leg.

Tools to stay focus

A few financial institutions like Royal Bank of Canada offer systems that can track your expenses and try to categorize them. If you are with a financial institution that has such a system you might save a bunch of time by simply transfering the numbers from there into Google Sheets. That way you won’t have to constantly keep your receipts.

Expenses Royal Bank of Canada

To Keep in Mind

A budget is certainly one of the best ways to take control of your financial life. By doing so you will find where the money goes and where you could cut to save more and maybe even invest that money after you’ve paid your credit card and other bad debts!

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