It never ceases to amaze me how easily money disappears whenever I neglect to track it. Now, most of the time I’m pretty diligent about handling my business. Oh, but then there are the occasions when “life happens”, and I get off track. You know what I mean – work, school, house to do’s, kid’s activities, family functions, blah, blah, blah…all the usual things that come along with adulting.
In order to avoid desertion of my funds during this war against debt, I find that it is necessary for me to be proactive and give my money marching orders. I achieve this by maintaining a monthly spending plan. Using excel, I enter my income amounts and deduct all my expenses. To prevent overdrafts, I input the deduction for fixed/known expenses (including debt payments and spending money) before they are actually withdrawn from my account. To cover irregular expenses (e.g. auto insurance, home and auto repairs, HOA dues, taxes…) I have a portion of each check deposited into various sinking fund accounts. Also, since saving for the future is a top priority, contributions to my 401K and emergency fund are automatically deducted from each paycheck. Ultimately, the funds from my checks are divvied up and spent/saved (on my excel sheet) before the money even reaches my account.
Since the spending plan for each month is continuously tracked on one excel sheet, I can easily scroll through and compare our household spending trends from month to month. This method of tracking also enables me to look ahead and take into account future expenses.
I realize there are other, more sophisticated, ways to budget and track spending. But using my personalized excel spreadsheet works best for me. Like I stated in my previous post, there’s not a one size fits all approach for managing personal finances. Basically, we all must decide what’s going to work best for each of our individual circumstances.
Do you have a working method for telling your money where to go?
Or does it just go absent without leave (AWOL) from month to month?
“If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.” —Edmund Burke
