We created a template for a year’s worth of income and spending!
Posted by John | Filed under Uncategorized
My wife and I recently decided to try to take more control of our finances (no debt, aside from an imminent mortgage) as in the past we’ve just built vague budgets to keep us from spending more than we make. We’ve never really had a plan for where we want to go. So, I grabbed your Excel budget sheet, but decided to add categories for planned spending (pre-payment fund, saving for replacing a car, etc.). Then, I decided to add a money tracker so we could input our spending from month-to-month and have it compare it to our budget, like a soft-copy of your budget binder. I also made it able to keep track of accumulating money, such as money for home maintenance which isn’t meant to be spent in full every month, but grow. What we now have is a template for a year’s worth of income and spending with opening balances for individual expenses, tracking for the year, then a closing balance for all of those expenses so you can feed them back into the opening balance at the start of the next year. We feel much better knowing exactly where we are going, and how much of a safety net we have.
June 6, 2012 at 12:54 pm
That’s pretty awesome. I wish I was better at the software stuff but I’m not so I still have a budget binder. It works great.
June 6, 2012 at 4:17 pm
Great idea. We too have a budget and plan for month to month spending to keep us from overspending what we make. But I find it very difficult to actually find ways to plan for bigger expenses. As it stands with our income we don’t have much ‘optional’ spending money – and therefore we find it hard to save for some items, especially those unexpected things. You have given me inspiration to at least look at a year’s worth of income/spending to see if maybe we can find ways to save more.
June 8, 2012 at 10:25 am
I have been using a budget like this for the last few years. I added a column for when I use my credit card so that I can remove from the area it was spent but add it back in for the balance in the bank. I also found a need fo a cell that shows postive or negative balance to plan. Not sure how to explain it other than my budget is based on monthyl income but this takes into account that there are two 3 pay months therefore I will have more in the budget for that month but not more to spend. So at the end of the month I put this balance if positive in one cell and if negative another cell. This way my balance of what is in the bank will always balance. It took me a while to figure this out after a few months of not balancing when I started the new month.
June 13, 2012 at 11:24 am
We too have laid out our planned spending/income for at least year in advance. It certainly gives you the big picture on the ebb and flow of your finances. More importantly it allows you to see well in advance where there may be timing issues of large payments due in weeks where you aren’t being paid. It also allows you to test out the “what ifs” of when to make extra RRSP contributions or mortgage payments without causing a problem the next week or month.
I don’t break it up into months but have a spreadsheet the just runs down the rows with a header inserted for each week (eg. this week is called Week 3 June 11-15)followed by the fixed and predicted expenses and income for that week. Any estimated amounts like groceries and gas are highlighted purple. When I replace it with the real number I remove the highlighing. The last row in every week has the description “Transfer excess to _______” as a reminder to review how much can be skimmed off and sent to the RRSPs, TFSAs or the mortgage. If there isn’t any excess that week (or it needs to be left there for expenses coming next week) I just delete the row.
I’ve personally never seen the logic of chopping the year into 12 months. So many of the items we track are not monthly. We are paid every two weeks. We pay our mortgage every two weeks, and not on the pay weeks. So months with 3 pays never align with the month with three mortgage payments. I pay the VISA every 7 days (on Friday right before I assess how much excess there is), the utilities are due every 30 days, groceries and gas are weekly. Then there are all the fees tied to school semesters and others paid quarterly or annually. Why out of all those payment schedules would I arbitrarily decide to cut my budget into 30 day chunks? To me is seems more logical just to have a running list of everything regardless. I’m always scrolling down to see what’s coming up soon and where the 1st of the month lands is kind of irrelevant. There are constantly payments going out and, hopefully, income being deposited. I think of it as waves coming and going.
Having a few years of history built up certainly makes predicting the future easier also. When I plan out the next year I review the past to see if any of the estimates I have been using need to be updated. Am I really sticking to the weekly grocery allotment or am I consistently under (or over). Have gas prices gone up enough that my weekly plug number needs to be increased. Putting in an estimate of $40/wk is useless if you always replace it with an actual number of $50. Having 7 years of hydro payments to reflect on (and cry over) allows me to accurately predict the seasonal swings in billing I should expect this year.
I think it’s definitely useful as an initial planning tool to do up a monthly budget: how much to I take home each month vs what to I spend in a normal month. After you’ve confirmed that you are spending less than you make, I have no further use for this view of my finances. It’s really all about the timing. Do I get paid the day before 8 bills are due or the day after?