You need to know where you are spending your money if you hope to ever gain control of your finances. Do you avoid keeping a budget because you think it takes too much work and time? Would you use something very simple that doesn't require a complicated software program? If you can enter numbers to an Excel spreadsheet, you can track your expenditures and manage your money very easily.
Use the BUDGET SPREADSHEET available free at the end of this article. Simply fill in your expense amounts for each month and the computer will automatically calculate all the totals. Or, you could use other budget forms or software and still follow the same steps below.
1. FOR PREDICTABLE CASH EXPENSES where you spend a similar amount every day, don't even think about entering the three dollars every time you spend it because you just won't do it.
- What if you know you usually spend $3 for donuts and coffee on your way to work? Multiply $3 times 20 workdays, which equals $60. Then enter this $60 under the "restaurants" category for that month in the budget form. You don't need to be accurate to the penny.
- Do this same thing for your other regular CASH expenses, such as the kids' school lunches, kids' allowances, parking fees, lunches at work, etc. Enter these regular expenses once a month and then forget about tracking them.
2. For OTHER CASH EXPENSES, keep the receipts and put them in an envelope by your computer.
- As soon as you can, enter the expenses on the form under the right category, such as "Restaurant", or "Auto" for a carwash.
- If there are two categories of expenses on the receipt, break the bill apart and enter the correct amount under the two categories. Don't try to be accurate to the penny. Just quickly "guesstimate" the two amounts.
- Also enter expenses that are deducted from your paycheck, such as premiums for medical insurance and life insurance or United Way contributions.
- Don't track your taxes withheld, or savings, or income; that's not the purpose of this form, and it would become too much of a chore.
3. CHECKS YOU WRITE ARE EASY TO TRACK.
- At the end of the month, take your checkbook register and just enter the amounts under the right categories in the budget form.
- Draw a little line in the checkbook so you know the last amount you have entered and so you will know where to start from next time.
- What? You say you don't always write in the amount and payee of the check. You need to do this to manage your checking account, so just do it.
- If you use a check card, you should also be writing the amount in your checkbook register.
- If you pay a fee for cashing your paycheck, enter it under the category of "Fees/Business".
- Enter any other checking account fees from your statement. Then make a mental note that check fees are the first expenses you should eliminate somehow.
4. Save the receipts for CREDIT CARD EXPENSES.
- Put them in the envelope by your computer, and enter them as soon as possible.
- When your credit card statement arrives, look at it and make sure you entered all your charges, such as automatic payments.
- You should also be looking for possible fraudulent charges since identity theft can happen to anyone.
- Do NOT enter the monthly credit card payment because you have already entered the individual things you charged.
- Enter, under the "Business" category, any credit card interest or fees you pay.
- HINT: If you are entering a charge purchase under two or more categories, ALWAYS enter the full amount of the charge under one category, such as "Grocery". Then, right below it on the budget form, enter a minus number to show you are subtracting, say, $15.25. Then, enter this $15.25 under the proper expense category, such as "Clothes". That way, when you are comparing your charge statement to your expense form, you will be able to quickly verify that you entered all the charges.
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The budget expense spreadsheet on the computer will automatically add up the monthly totals for each category. It will also give you a total by category for the year. Now, you can easily see where your hard-earned money is going and you are ready to take control of your spending.
Go to http://www.forhonor.com. Click the option at the top right for free downloads. You will then be able to click the Budget Spreadsheet Template option and download it to your computer. The download is free and no signup is required. Have fun taking control of your money.
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