Last week we made our spreadsheet a bit more robust by adding in a Checking account and Savings account rows. If you need to review, you can find the post here.
This week, I will explain how to use this spreadsheet on an ongoing basis as your expense tracking tool in addition to being a budgeting and projecting tool.
Let’s start with the most fool-proof way of sticking to your budget and meeting your projections. Each month, in our example, remove $300 (the incidentals) from your checking account. You can do this all at once at the beginning of the month or split it up. Maybe $150 on the 1st and $150 on the 15th. This all depends on your comfort level with managing your spending. Here’s the kicker: DO NOT TAKE ANY ADDITIONAL MONEY OUT OF YOUR ACCOUNT. Period. Of course, occasionally there are emergencies such as a blown tire or a medical bill but, if it’s not an emergency, don’t do it!
This money is yours for the month. Use it however you please remembering that you will need to buy gas and groceries out of this money at some point. If you do not use all of the money in the month, decide what is best for you. Would you rather hold it as your spending money just in case, save for a larger treat, or put it in your savings account.
If you are trying to build credit but can’t get approved, consider opening a secure credit card where you deposit your money into the account and you can only use how much you have. With this option, you can have an automatic transfer that takes the money out of your checking account for you and deposits it to the secure account.
Tracking your expenses is more than entering in about what you think your expenses will be for the month. While this is a great tool for predicting, it only acts as a placeholder when it comes to utilization of your spreadsheet.
My suggestion for tracking your expenses is to color code your cells. For all income and expenses where the amounts change each time they occur, I change the text to Blue. For all of the expenses with set amounts, I keep the text Black.
As I get my bills and paychecks, I add the correct amount over the blue estimated amount and change the color to black. This shows me that I have already accounted for the item and helps me track where I’m at in the spreadsheet so I don’t have to look up to the months each time. Once the month is complete, there should be no blue words left.
1. Take the incidentals money out of your checking account.
2. Update your spreadsheet with every new income or expense.
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