March 31, 2010

Taking Control

 I told you I would post it, so here it is - finally. Over the last few months I've come to realize I was really being lazy about the budget. I always made sure all the bills were covered, but we've never really been careful about what to do with the rest of the money. It's all just kind of floated in and out. So I came up with this sheet. I looked over our Quicken accounts for the last six months and picked the ones that occur on a regular basis and added them to the list. Here's how it works.

You start a new one at the beginning of each month. You have a general master plan for the whole year, but things change so having a new one for each month will be the best. This way you can tailor it to any upcoming events or needs.

The first column lists each expense, grouped by category. These change for each family, but the ones in the screenshot are our general ones. In the second column is the "expected" amounts. At the top you put in your expected income, then your expected or budgeted expenses. In the third column you place what you actually made, as well as what you actually spent. If you're just starting out, going over budget by a little is alright (as long as it's not causing serious financial hardship), you'll get the hang of keeping track and staying in the set amount. Obviously though, what you budget to spend should not exceed what you expect to get. If you're over then you need to cut something (or multiple things). It's important to not just blow it off as "oh, I'll do better/make up for it next month." I've been bad about doing that with groceries (see previous posts of guilt).

At the bottom are places to put totals and differences. I total up the budgeted expenses and subtract them from the expected income. This is what amount we have projected as leftover for savings or debt repayment. I will do the same with the "actual" totals, and that amount will be used as decided. If you would like, you could roll any "extra" money into the next month. For example, if we didn't spend our $150 allotted for home improvement, we might roll it over to next month and the month after to save up for a new floor. The best outcome though, would be to have extra money to throw at any debt. 

The last section is for yearly expenses like car registration and gifts, as well as account balances as of the beginning of the month (like whatever debts you have, and checking and savings accounts if you'd like to have those available). For the yearly expenses I divide the total amount by 12 and put that amount in the budget for each month, then put it into the savings. For example, our car registrations for the year come out $526/12 = $44 a month (rounded up). This way, by the time that bill rolls around we will have it sitting in savings ready to go (and collecting interest) rather than scrambling to come up with the money. Same for gifting. Saving a little bit each month is easier than trying to squeeze out a birthday or Christmas present if you don't have any money left. Just total up any gifts you plan to give over the whole year and go from there.

If you want to get ahead at all you have to have a budget and tell your money where to go. I think this will work for us quite nicely.

I would be happy to send my blank version for you to fill in to anyone who wants it. Just drop me an email at I'll zip it over to you as soon as I can. Or, just grab a piece of paper and write one out. It doesn't matter what method you use, it's just important to do it.

PS. On a slightly different note, but still related to money - by using my "Keep The Change" System I have put $94 into savings since the end of December. WOOHOO!

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