Budgeting and tracking your spending are basic life skills that everyone should master.
Unfortunately, most people don’t do this and that is absurd to me because it causes all kinds of unnecessary stress that can be easily avoided by implementing a simple system.
Well the good news is that even if you’re not currently budgeting your personal finances, it’s pretty easy to set up. And if you’re like me, it will make you feel much better being in control of your money.
So, what should this system look like?
It doesn’t really matter, as long as you have a way to track all of your expenses and income. Setting a budget is only the first step. After that, you need to track against it.
Tracking EVERYTHING you spend might sound anal to you, but I can assure you it is worth the effort. If you half-ass it, you won’t get anywhere. You can’t just record stuff when you feel like it or “guesstimate” to the nearest hundred dollars. You need to make it a habit.
If you do it right, it should take less than five minutes a day to record everything. You just need a simple method.
And I have just the tool for you.
My free personal monthly budget spreadsheet will help you get your finances together by tracking your expenses and income daily.
It is also the easiest personal finance tracking tool you’ll ever use. All you need to do is record everything you spend and it will automatically populate a nice display of spending by category and month for the current year.
Use it and you’ll never be clueless about where your money is going ever again.
Here’s how to use the spreadsheet:
Step 1: Set budget goals by expense category in the “Year” tab. Make sure your total expenses is less than your total income (duh).
Step 2: Track everything you spend and earn on the “Data” tab.
Enter your date, select a category and enter the name of the expense or income item.
For example, let’s say you spent $10 at Chipotle on January 1 and got a $2,000 paycheck on January 2.
Your data entries are automatically summarized by category and month in the “Year” tab.
Step 3: Review your spending from month to month and make changes to your budget as applicable.
That’s all there is to it. Pretty low maintenance, if you ask me.
The key is to make it a part of your routine. Take five minutes each day to show the spreadsheet some love. Schedule it in after a routine night time activity, like brushing your teeth to make sure you don’t miss a day.
Just jump on your computer, log in to your credit card and bank accounts and record all your spending for the day. That’s all there is to it.
Once you get in the habit of tracking your spending, it will become automatic.
I’ve tracked every dollar I’ve spent for over a decade and I know I’m better off for it because I have no credit card debt and an emergency fund that can easily take care of stupid expenses like replacing an A/C unit, which I had to do recently.
There’s a good reason why every single company makes financial planning, budgeting, and monitoring a major part of their operations. You should too.
Feel free to contact me if you have any questions!