About 3 years ago I realized I had no control over our finances. I knew when we had a surplus in the checkbook (not often), knew when we were running on empty, and knew when we were in the red. But that was all I knew. Unfortunately we had to get to a place where things were getting ugly before I stepped up and starting taking control.
First thing I did was track our spending for 2 months. Based on where our money was going I created a budget. It was a crappy budget, but it was something to work with. In the last 3 years I’ve been refining our budget numbers, as well as the spreadsheet that I use to keep track of things. Over the years I’ve had a few friends and family members ask me for copies of the budget spreadsheet, and I’ve gladly sent them along. When a good friend asked me last week for a copy, I decided it was time to put it online in the event that more folks might benefit from it.
So that’s what I’m doing: I’m putting two versions of the spreadsheet on line: a Cyber version and an Offline Version. Both spreadsheets look almost identical. The difference is, you update the cyber version on your computer using Excel (not web-based, it’s a desktop file), and you print out the Offline version and fill it in by hand. Personally, I use the Offline version. I find it easier to collect my receipts every day and write each item on the sheet. But I created the Cyber version this week for folks who might want to keep things updated on their computers. (because it’s new, it might have some glitches and mistakes…so bear with me on it.)
Here’s a screenshot of the Cyber sheet to give you a basic idea:
A FEW NOTES ABOUT THE SPREADSHEET FILE:
+ I currently get paid every two weeks, so this budgeting system is based off of receiving 26 paychecks per year. I consider one “budget month” to be 2 paychecks, therefore there are 13 budget months every year (each one is 28 days long). As you know, there are only 12 “real months” in a year. This means there are two extra paychecks. Those paychecks are not needed for monthly bills. I use the summer one to pay for vacation and the winter one to pay for Christmas presents. Here’s an example of what I mean from 2008 (it makes more sense when you look at the worksheets in the file):
- January’s bills are paid with paychecks from Jan-3 and Jan-17
- February’s bills are paid with paychecks from Jan-31 and Feb-14
- March’s bills … Feb-28 and Mar-13
- April’s bills … Mar-27 and Apr-10
- May’s bills … Apr-24 and May-8
- then you have an xtra paycheck on May-22 you don’t need to put towards monthly bills
- June’s bills are paid with paychecks from Jun-5 and Jun-19
- and so on
+ If you get paid once a month, or twice a month (which is different than every two weeks), then you can simply remove the worksheets in the file for the XTRA paychecks.
+ The setup of the spreadsheet is pretty self-explanatory. In both versions you set it up by typing in your expected income sources and outgo items. Once you’ve got your income items in, and your expected bills in, you divvy up the rest of the month’s income for each specific category. There’s saving, giving, fuel, clothing, food categories, and a few others. All you need to do is make sure the “Projected Income” box is the same as the “Projected Outgo” box. (well, then you actually have to stick to the budget, which is the hardest part.)
+ When you open up the file, you’ll notice that each month has it’s own spreadsheet. This allows you to customize a budget for each month. If you have a $120 sewer bill you only pay every quarter, instead of budgeting $40/month to pay it, you can budget all $120 in the month you actually pay it, and budget $0 in the months you don’t.(though if you’d rather spread quarterly bills out over each month, you can do that too.)
+ There’s a box for “starting balance” of your account at the beginning of the month. At the start of each month, do the math on last month’s budget sheet to see where you’re at. Then write it in (or type it in) to the “Starting Balance” box. (In the Cyber version I do not have a link between last month’s ending balance and the next month’s starting balance. It’s easy enough to do, I just would rather type it in.)
+ Also, with the cyber version it should be noted that the “+/- for the month” box is there for the end of the month when your income and outgos are all entered. At that point this box will accurately tell you if you are over or under budget for the month. This box isn’t intended to be a running total, as it won’t give you an accurate view of how you’re doing midway through the month. You can do that easily enough by checking the remaining balance in each of your sub-categories.
If you don’t have a budget, you probably should. And if you’re looking for a better system, give this one a try. It’s not as complicated as my explanations were, and I can answer any questions you have if you get confused. Here’s where you can download the budget sheets: