Showing posts with label home. Show all posts
Showing posts with label home. Show all posts
Sunday, May 27, 2012
Last Post?
Well, it's been about two months since we posted to this blog. We did not intend to wait this long, but circumstances prevented us from posting. We really only had one other thing we had planned to possibly post. That was to create a more advanced version of the budget spreadsheet we discussed in earlier posts. However, we were unsure as to how many people would actually be interested in this. If you are one who is interested, please leave a comment saying so. If enough people express an interest, we'll prepare it and post it.
Also, if anyone has any questions about any of the previous posts in this blog, or if you just have general budgeting questions, please leave a comment with your questions.
For those who have followed this blog, we hope we have helped you with your household budgeting.
Thanks,
Randy and Kathy
Monday, January 30, 2012
Second Budget
Well, hopefully you made it through setting up your real budget just fine and were able to get all your transactions entered for the first half of the month. It’s now time to examine how your second budget might look. Remember that the Savings column can look either better or worse than it really is after the first budget. It depends on when your paychecks come in. If all paychecks are received twice a month or perhaps every two weeks, then the Savings numbers should reflect reality. However, if one or more paychecks are received only once a month, then the numbers can look good or bad depending on what time of the month they are received. In the case of our sample budget for Jack and Jill, Jill receives two paychecks per month while Jack gets one during the first two weeks of each month. This made their Savings category look really flush with money on the first budget. But as you can see below, the second budget brings the Savings back in line (with a balance of over $300) because Jack has no paycheck being deposited during this budget cycle.
Click image for an enlarged view
Download OpenOffice Calc version of this spreadsheet
Download Microsoft Excel version of this spreadsheet
As you can also see, some other regular bills were paid during this half-month cycle. Fortunately, most budget categories held their own. However, it appears that an unexpected plumbing problem cost Jack and Jill $85 and thus put their House Upkeep category in the red. This is okay as long as no other unexpected repairs are needed in the near future. If the overall balance in their checking account remains above zero, then there is no need to panic. Hopefully, the deficit in any given categories can be made up over the next few budget cycles.
The only other possible problem seems to be in Jack’s personal money column. He’s in the red by almost $16. If Jack has at least $16 in his wallet, he is okay; but if not, he needs to watch what he spends over the next budget cycle to make up the deficit.
Notice that Jack and Jill did real well with their Food budget. They ended the month with a surplus of $34. As long as they can maintain this level of spending, all will be well. However, if they begin to loosen up too much and start eating out more, they could find themselves in trouble.
If you found yourselves, in your real budgets, overspending left and right, then all we say is that you must begin changing your mindset right now! We know it can be difficult going from freely spending money to spending a controlled amount. You must begin settling for less. It can be done. Many other people have done it. As you work towards your goal of reducing spending, one thing to keep in mind is that most of what we buy are things we want rather than things we need. If you were to cut your spending to just your needs, you would most likely find yourself spending much less than you are taking in. So, whenever you find yourself wanting to make a purchase, evaluate the necessity of the item and how the purchase will affect your budget’s bottom line. If it’s not really needed and your budget can’t handle it, don’t buy. Keep working at this until the lower spending amounts just come natural to you.
In the next post, we’ll give you a few tips about controlling spending in case you continue to have problems.
Download OpenOffice Calc version of this spreadsheet
Download Microsoft Excel version of this spreadsheet
As you can also see, some other regular bills were paid during this half-month cycle. Fortunately, most budget categories held their own. However, it appears that an unexpected plumbing problem cost Jack and Jill $85 and thus put their House Upkeep category in the red. This is okay as long as no other unexpected repairs are needed in the near future. If the overall balance in their checking account remains above zero, then there is no need to panic. Hopefully, the deficit in any given categories can be made up over the next few budget cycles.
The only other possible problem seems to be in Jack’s personal money column. He’s in the red by almost $16. If Jack has at least $16 in his wallet, he is okay; but if not, he needs to watch what he spends over the next budget cycle to make up the deficit.
Notice that Jack and Jill did real well with their Food budget. They ended the month with a surplus of $34. As long as they can maintain this level of spending, all will be well. However, if they begin to loosen up too much and start eating out more, they could find themselves in trouble.
If you found yourselves, in your real budgets, overspending left and right, then all we say is that you must begin changing your mindset right now! We know it can be difficult going from freely spending money to spending a controlled amount. You must begin settling for less. It can be done. Many other people have done it. As you work towards your goal of reducing spending, one thing to keep in mind is that most of what we buy are things we want rather than things we need. If you were to cut your spending to just your needs, you would most likely find yourself spending much less than you are taking in. So, whenever you find yourself wanting to make a purchase, evaluate the necessity of the item and how the purchase will affect your budget’s bottom line. If it’s not really needed and your budget can’t handle it, don’t buy. Keep working at this until the lower spending amounts just come natural to you.
In the next post, we’ll give you a few tips about controlling spending in case you continue to have problems.
Thursday, December 29, 2011
Creating a Spreadsheet
Now that we’ve got a budget planned out, it’s time to create a spreadsheet to make it easy to maintain on a regular basis. The new year is a perfect time to begin a budget. We hope to have you in a position to start your budget by January 15, the time that the first transactions for the year need to entered into a spreadsheet.
The first decision to make is what spreadsheet software to use. There are many different programs varying widely in price that will work just fine. If you already own a copy of Microsoft Excel, we recommend that you use it. We currently use Excel 2007. However, essentially any version will do. If you already own another spreadsheet software package, it will most likely be acceptable since a budget spreadsheet does not require any fancy or complex processing. If you don’t already have spreadsheet software, we recommend you download the free open source OpenOffice.org (OOo) suite of productivity software (http://www.openoffice.org). One of the products in this suite is Calc, a spreadsheet program. It supports many of the same features included in Microsoft Excel and should work fine for budgeting. For our current purposes, we will be using OOo Calc just to show how a free product is more than capable of handling our budgetary needs. We are using OOo version 3.3.0. Its native file format's extension is “ods”; however, files can also be saved in Excel format (“xls”) should you ever decide to switch to Microsoft’s product.
There are a number of different ways a budget spreadsheet could be laid out, but we like the layout shown below.
It is not our mission to give instructions on how to use spreadsheet software. There are many existing books and Web sites that do a great job of that. Our mission is to show you how to set up an efficient budget spreadsheet. With that in mind, please note some of the features of the sheet above. Cell A1 shows the current year and the budget number for that year. If you follow our recommendation and update your budget twice a month, then you will be generating 24 sheets over the course of a year. The first budget sheet for a new year will be generated mid-January. The second one will be generated at the end of January, and the final one for the year at the end of December. Cell A1 should read 2012-02 for the second budget of the year. When the final budget sheet for the year is generated, cell A1 should read 2012-24.
Cells A2 through C3 show header information. Column A is formatted as Text and will be used to enter Transaction Numbers, thus its heading. A transaction number can be a check number, an online bill pay sequence number, or text like Deposit, Transfer, Debit, etc. Column B is formatted as Date (MMM DD) and will be used to enter the transaction date. The M-D-12 indicates that all the dates are months and days in the year 2012. Column C is formatted as Text and will be used for entering where the transactions took place, such as Best Buy, JCPenney, or Amazon.com.
Note that the date for the Starting Balance is Jan 01. At the bottom of the sheet in row 80 you see that the Ending Balance is for Jan 15. Once this budget sheet is complete and preparation is being made for the next semimonthly budget sheet, the Starting Balance date will be changed to Jan 15 and the Ending Balance date will be changed to Jan 31. We will discuss how to determine your Starting Balance for each budget category in the next post, as well as how to fill in the Semimonthly Allowance values in row 79.
Columns D through U contain the headers for the budget categories determined in previous posts. Below the appropriate headers will go the monetary amounts of each transaction. Therefore, rows 3 through 80 for columns D through U are formatted as Currency. Row 80 for each of these columns sum up all the amounts in rows 3 through 79. Thus this sum, for each column, represents the Starting Balance minus all the transaction amounts plus the Semimonthly Allowance for that column, resulting in an Ending Balance for the budget period.
Row 82 shows the overall balance for your checking account in column U (not shown in figure). This is simply a sum of all the Ending Balances from columns D through U. There is nothing magical about the number of rows that are allotted for transactions. We use a budget sheet with a total of 82 rows (includes the Total row). Over time we determined that it was rare for us to have so many transactions during a budget period as to exceed this number of rows. Also, it was about the maximum number of rows that would fit on a single landscape 8.5”x11” sheet of paper and still have text large enough to read. If you find that you need larger text, you can either use fewer rows or plan on printing the spreadsheet across two sheets of paper.
Notice that the headers are various colors to separate them. This is nice if you are using a color printer to create hardcopies of the budget sheets. If you use a black and white printer, then this is unnecessary.
Please download the blank budget spreadsheet using the links below so you can see the entire sheet on your computer:
OpenOffice.org format (.ods):
http://www.rkaproductions.com/files/Budget Spreadsheet Blank.ods
Excel format (.xls):
http://www.rkaproductions.com/files/Budget Spreadsheet Blank.xls
In the next post we’ll discuss how to initialize the blank sheet with Starting Balances and Semimonthly Allowances.
The first decision to make is what spreadsheet software to use. There are many different programs varying widely in price that will work just fine. If you already own a copy of Microsoft Excel, we recommend that you use it. We currently use Excel 2007. However, essentially any version will do. If you already own another spreadsheet software package, it will most likely be acceptable since a budget spreadsheet does not require any fancy or complex processing. If you don’t already have spreadsheet software, we recommend you download the free open source OpenOffice.org (OOo) suite of productivity software (http://www.openoffice.org). One of the products in this suite is Calc, a spreadsheet program. It supports many of the same features included in Microsoft Excel and should work fine for budgeting. For our current purposes, we will be using OOo Calc just to show how a free product is more than capable of handling our budgetary needs. We are using OOo version 3.3.0. Its native file format's extension is “ods”; however, files can also be saved in Excel format (“xls”) should you ever decide to switch to Microsoft’s product.
There are a number of different ways a budget spreadsheet could be laid out, but we like the layout shown below.
It is not our mission to give instructions on how to use spreadsheet software. There are many existing books and Web sites that do a great job of that. Our mission is to show you how to set up an efficient budget spreadsheet. With that in mind, please note some of the features of the sheet above. Cell A1 shows the current year and the budget number for that year. If you follow our recommendation and update your budget twice a month, then you will be generating 24 sheets over the course of a year. The first budget sheet for a new year will be generated mid-January. The second one will be generated at the end of January, and the final one for the year at the end of December. Cell A1 should read 2012-02 for the second budget of the year. When the final budget sheet for the year is generated, cell A1 should read 2012-24.
Cells A2 through C3 show header information. Column A is formatted as Text and will be used to enter Transaction Numbers, thus its heading. A transaction number can be a check number, an online bill pay sequence number, or text like Deposit, Transfer, Debit, etc. Column B is formatted as Date (MMM DD) and will be used to enter the transaction date. The M-D-12 indicates that all the dates are months and days in the year 2012. Column C is formatted as Text and will be used for entering where the transactions took place, such as Best Buy, JCPenney, or Amazon.com.
Note that the date for the Starting Balance is Jan 01. At the bottom of the sheet in row 80 you see that the Ending Balance is for Jan 15. Once this budget sheet is complete and preparation is being made for the next semimonthly budget sheet, the Starting Balance date will be changed to Jan 15 and the Ending Balance date will be changed to Jan 31. We will discuss how to determine your Starting Balance for each budget category in the next post, as well as how to fill in the Semimonthly Allowance values in row 79.
Columns D through U contain the headers for the budget categories determined in previous posts. Below the appropriate headers will go the monetary amounts of each transaction. Therefore, rows 3 through 80 for columns D through U are formatted as Currency. Row 80 for each of these columns sum up all the amounts in rows 3 through 79. Thus this sum, for each column, represents the Starting Balance minus all the transaction amounts plus the Semimonthly Allowance for that column, resulting in an Ending Balance for the budget period.
Row 82 shows the overall balance for your checking account in column U (not shown in figure). This is simply a sum of all the Ending Balances from columns D through U. There is nothing magical about the number of rows that are allotted for transactions. We use a budget sheet with a total of 82 rows (includes the Total row). Over time we determined that it was rare for us to have so many transactions during a budget period as to exceed this number of rows. Also, it was about the maximum number of rows that would fit on a single landscape 8.5”x11” sheet of paper and still have text large enough to read. If you find that you need larger text, you can either use fewer rows or plan on printing the spreadsheet across two sheets of paper.
Notice that the headers are various colors to separate them. This is nice if you are using a color printer to create hardcopies of the budget sheets. If you use a black and white printer, then this is unnecessary.
Please download the blank budget spreadsheet using the links below so you can see the entire sheet on your computer:
OpenOffice.org format (.ods):
http://www.rkaproductions.com/files/Budget Spreadsheet Blank.ods
Excel format (.xls):
http://www.rkaproductions.com/files/Budget Spreadsheet Blank.xls
In the next post we’ll discuss how to initialize the blank sheet with Starting Balances and Semimonthly Allowances.
Monday, November 28, 2011
Adjusting Expenditures
In the last post it looked like things were pretty bad. Living at the standard we would like was going to put us further in debt to the tune of over $9,000 per year. NOT GOOD! Our goal is to pay off debts while still putting money into savings. This may seem like an impossible task, but it really isn’t. Yes, you may have to make sacrifices you don’t really want to make, but if that is what is needed, plan to do it. You may find that it is not as bad as you might think. So, let’s put on our thinking caps and tackle each budget category in turn.
Charity
If need be, the charity budget could be reduced to zero without having to change your lifestyle at all. However, most people we know want to support causes they believe in if at all possible. Therefore, let’s hold off on reducing the money in this category. If we find out later that our budget will only work by reducing charitable giving, then we’ll make an adjustment.
Gifts
While it is nice to be able to buy our friends and family nice gifts at special occasions, I believe those close to us will understand if we cannot do this while we are trying to get our family finances in order. There are a number of things you can do to reduce expenditures for gifts. You might try making gifts yourself rather than buying them. Or you might give part of your charity money to an organization your gift recipient likes and then give them a card saying that you have made a donation in their honor. At Christmas, you might want to see if your family is willing to draw names so each family member only buys for one other family member rather than everybody. We have personally agreed in our family to only buy for children, thus eliminating the cost of buying for adult family members. I’m sure you can think of other creative ways to reduce the cost of gift giving. We should be able to cut the money in this category in half; from $80 to $40 per month.
Mortgage
You really don’t want to decrease payments towards your house. And even if you did, it may not be possible according to the terms of your contract. If at all possible, you want to increase payments towards the mortgage so as to save money on interest. However, as we stated before, don’t increase this payment until you have totally paid off other higher interest loans. Of course, if you are holding an older mortgage, it may be worthwhile refinancing your house if you can get a new loan with a significantly reduced interest rate. We have heard that after rolling in the closing costs for the new mortgage, the new interest rate needs to be about 2% less than your existing rate for the switchover to save you money. However, keep your eyes open. Sometimes you can find loans for refinancing that have very low or nonexistent closing costs. For the purposes of this exercise, however, let’s assume the mortgage payment needs to stay at $500 per month.
House Upkeep
There are some upkeep items, such as essential repairs, that simply cannot be eliminated from this category. However, some things can at least be delayed. For instance, you can live with that scuffed up wall a bit longer, thus saving the cost of painting. Those spots on the carpet can be covered with a rug rather than paying the cost of professional cleaning or replacing the carpet outright. We may not be able to reduce the budgeted amount for this category much, but it can be reduced some. Let’s lower the amount from $100 to $75 per month.
Home Decorations
Since this category is a nicety rather than a necessity, it can be eliminated altogether. Sure, your home may not look as nice as the Jones’ house down the street, but your finances will look a lot nicer. Just so you can feel like some minor improvements can be made, we’ll not totally zero out this category, but we will greatly reduce it. From $50 to $10 per month.
Utilities
Some of these costs are not adjustable, such as garbage collection and sewage. Usually these costs are a set dollar amount per month. However, other things such as water, electricity, and gas, where you pay based on usage, are more under your control. There are several things you can do to reduce usage. You can increase the temperature in your home in the summer and decrease the temperature in the winter. Try using fans in the summer and blankets in the winter to compensate. You can also close off vents in areas of your house that are used infrequently. Perhaps your hot water heater could use an insulating wrap. Perhaps you can reduce the amount of water used on your lawn by targeting problem areas while cutting back in other areas. Maybe you can bathe less frequently and wear your clothes more before washing them. There are a lot of things that can be done to cut the cost of utilities. Surely with all these options we can reduce our utility costs from $250 to $200 per month.
Communications
In reality, we could get rid of our TV service, all our phones, and our Internet service and still be able to survive. It might be difficult, but not impossible unless your work depends on these services. So, not to be too harsh about this, let’s look at ways to reduce these costs rather than eliminate them altogether. Many people who use cell phones have eliminated their land line phone. That’s one way. Also, if your family is using smart phones, you might want to drop back to a regular phone to save the cost of data services. You might want to drop back to a lower tiered plan on your TV service. Yeah, you might have to give up a few stations you like, but why pay for 100 extra channels just to get a few that you watch if it’s going to cause a family financial crisis. Also, you might change to a lower speed Internet service to save a few bucks. Before making any of these changes, be sure to see if your contracts require you to pay a penalty. If so, see if the company providing the services will work with you after explaining your financial situation. If it’s going to end up costing you more to reduce your services, then there is no need to do so. You should be able to get your $400 per month budget down to $200 per month without too much pain, even if your teenagers may disagree.
Food
If you are frugal, you can get by with a lot less money for food than you believe you can. It should be possible for you to reduce the money in this category from $600 to $450 per month, which is what we discussed before. This amount allows for $5 per meal for the entire family and three meals per day. If you eat cereal for breakfast and sandwiches for lunch, these meals can come in under the $5 amount. This would allow for more expensive evening meals. Of course, you can mix and match any way that best suits your family’s lifestyle. If you are really frugal, you might even find that you can eat out occasionally. Some things you can do to reduce food expenses is to look for sales and stock up when really good prices are available. Although the initial cost is a bit high, you might want to invest in a vacuum sealer. This allows you to purchase large quantities of meat when on sale and then seal it so it lasts longer in the refrigerator or freezer. Also, you might want to take lessons from extreme couponing people. We have seen people on TV who are able to buy hundreds of dollars of food for just a few bucks. It’s still a bit of a mystery to us, but it’s apparently possible. Of course, you have to be willing to eat what you can get cheaply via the coupons, but it should be well worth the effort.
Medical
Since this is such an unpredictable category, you should be hesitant to reduce the amount budgeted for it. So, just leave it at $200 per month.
Transportation
Transportation expenses may be hard to reduce depending on your primary mode of transportation. If you use public transportation frequently, it may be difficult to reduce these costs. However, if you drive your own vehicle, you might see if you can carpool several days a week to reduce expenses. If this is not feasible, perhaps you and your spouse can team up, given that it’s not too far out the way to do so. If your family takes weekend trips frequently, you might try taking shorter trips or eliminating some of them. With some of these changes, you should be able to reduce transportation costs from $600 to $500 per month.
In the next post, we'll make adjustments to the remaining categories and take a look at the new numbers to see how we have done.
Charity
If need be, the charity budget could be reduced to zero without having to change your lifestyle at all. However, most people we know want to support causes they believe in if at all possible. Therefore, let’s hold off on reducing the money in this category. If we find out later that our budget will only work by reducing charitable giving, then we’ll make an adjustment.
Gifts
While it is nice to be able to buy our friends and family nice gifts at special occasions, I believe those close to us will understand if we cannot do this while we are trying to get our family finances in order. There are a number of things you can do to reduce expenditures for gifts. You might try making gifts yourself rather than buying them. Or you might give part of your charity money to an organization your gift recipient likes and then give them a card saying that you have made a donation in their honor. At Christmas, you might want to see if your family is willing to draw names so each family member only buys for one other family member rather than everybody. We have personally agreed in our family to only buy for children, thus eliminating the cost of buying for adult family members. I’m sure you can think of other creative ways to reduce the cost of gift giving. We should be able to cut the money in this category in half; from $80 to $40 per month.
Mortgage
You really don’t want to decrease payments towards your house. And even if you did, it may not be possible according to the terms of your contract. If at all possible, you want to increase payments towards the mortgage so as to save money on interest. However, as we stated before, don’t increase this payment until you have totally paid off other higher interest loans. Of course, if you are holding an older mortgage, it may be worthwhile refinancing your house if you can get a new loan with a significantly reduced interest rate. We have heard that after rolling in the closing costs for the new mortgage, the new interest rate needs to be about 2% less than your existing rate for the switchover to save you money. However, keep your eyes open. Sometimes you can find loans for refinancing that have very low or nonexistent closing costs. For the purposes of this exercise, however, let’s assume the mortgage payment needs to stay at $500 per month.
House Upkeep
There are some upkeep items, such as essential repairs, that simply cannot be eliminated from this category. However, some things can at least be delayed. For instance, you can live with that scuffed up wall a bit longer, thus saving the cost of painting. Those spots on the carpet can be covered with a rug rather than paying the cost of professional cleaning or replacing the carpet outright. We may not be able to reduce the budgeted amount for this category much, but it can be reduced some. Let’s lower the amount from $100 to $75 per month.
Home Decorations
Since this category is a nicety rather than a necessity, it can be eliminated altogether. Sure, your home may not look as nice as the Jones’ house down the street, but your finances will look a lot nicer. Just so you can feel like some minor improvements can be made, we’ll not totally zero out this category, but we will greatly reduce it. From $50 to $10 per month.
Utilities
Some of these costs are not adjustable, such as garbage collection and sewage. Usually these costs are a set dollar amount per month. However, other things such as water, electricity, and gas, where you pay based on usage, are more under your control. There are several things you can do to reduce usage. You can increase the temperature in your home in the summer and decrease the temperature in the winter. Try using fans in the summer and blankets in the winter to compensate. You can also close off vents in areas of your house that are used infrequently. Perhaps your hot water heater could use an insulating wrap. Perhaps you can reduce the amount of water used on your lawn by targeting problem areas while cutting back in other areas. Maybe you can bathe less frequently and wear your clothes more before washing them. There are a lot of things that can be done to cut the cost of utilities. Surely with all these options we can reduce our utility costs from $250 to $200 per month.
Communications
In reality, we could get rid of our TV service, all our phones, and our Internet service and still be able to survive. It might be difficult, but not impossible unless your work depends on these services. So, not to be too harsh about this, let’s look at ways to reduce these costs rather than eliminate them altogether. Many people who use cell phones have eliminated their land line phone. That’s one way. Also, if your family is using smart phones, you might want to drop back to a regular phone to save the cost of data services. You might want to drop back to a lower tiered plan on your TV service. Yeah, you might have to give up a few stations you like, but why pay for 100 extra channels just to get a few that you watch if it’s going to cause a family financial crisis. Also, you might change to a lower speed Internet service to save a few bucks. Before making any of these changes, be sure to see if your contracts require you to pay a penalty. If so, see if the company providing the services will work with you after explaining your financial situation. If it’s going to end up costing you more to reduce your services, then there is no need to do so. You should be able to get your $400 per month budget down to $200 per month without too much pain, even if your teenagers may disagree.
Food
If you are frugal, you can get by with a lot less money for food than you believe you can. It should be possible for you to reduce the money in this category from $600 to $450 per month, which is what we discussed before. This amount allows for $5 per meal for the entire family and three meals per day. If you eat cereal for breakfast and sandwiches for lunch, these meals can come in under the $5 amount. This would allow for more expensive evening meals. Of course, you can mix and match any way that best suits your family’s lifestyle. If you are really frugal, you might even find that you can eat out occasionally. Some things you can do to reduce food expenses is to look for sales and stock up when really good prices are available. Although the initial cost is a bit high, you might want to invest in a vacuum sealer. This allows you to purchase large quantities of meat when on sale and then seal it so it lasts longer in the refrigerator or freezer. Also, you might want to take lessons from extreme couponing people. We have seen people on TV who are able to buy hundreds of dollars of food for just a few bucks. It’s still a bit of a mystery to us, but it’s apparently possible. Of course, you have to be willing to eat what you can get cheaply via the coupons, but it should be well worth the effort.
Medical
Since this is such an unpredictable category, you should be hesitant to reduce the amount budgeted for it. So, just leave it at $200 per month.
Transportation
Transportation expenses may be hard to reduce depending on your primary mode of transportation. If you use public transportation frequently, it may be difficult to reduce these costs. However, if you drive your own vehicle, you might see if you can carpool several days a week to reduce expenses. If this is not feasible, perhaps you and your spouse can team up, given that it’s not too far out the way to do so. If your family takes weekend trips frequently, you might try taking shorter trips or eliminating some of them. With some of these changes, you should be able to reduce transportation costs from $600 to $500 per month.
In the next post, we'll make adjustments to the remaining categories and take a look at the new numbers to see how we have done.
Sunday, November 13, 2011
Allocating Income Part 2
This is a continuation of our Allocating Income post from about a week ago. Here we budget money for the remaining categories.
Medical
Medical budgeting is difficult simply because one major problem can set you back a lot of money. As with other categories, this one can only be predicted based on past expenditures. However, if you know that a large unusual medical expense is in your immediate future, then be sure to account for it in your budget for the year. Let’s allot $200 per month for now and modify as needed later.
Transportation
Transportation expenses can vary greatly depending on how many cars your family owns and whether or not you still owe money on them. Also affecting these costs are how high your taxes are in your state and how much gas mileage your vehicles get. If you live in the big city and use public transportation, the frequency of use and the distances you must travel will determine much of the amount needed for this category. As we said before, be sure to include money for plane, train, and rental car expenses if you travel away from home frequently. Based on our past experiences, $600 per month is probably a good average number to use. If you like to buy all drivers in your family new cars every few years, then this number won’t even scratch the surface.
Insurance
This category covers every type of insurance you have except for homeowners, which is included in the mortgage category. These are things like homeowners, car, health, life, long-term care, and pet insurance. There are so many types of insurance to help protect you from loss that the cost can quickly get out of hand. Many of the premiums will be paid annually, semi-annually, or quarterly. For each, a calculation must be made to determine what the cost is on a monthly basis. For instance, if you pay $1000 per year for homeowners insurance, that would be $1000/12 or $83.33 per month. One of the most expensive insurance costs is auto insurance for a teenage driver. So, we’re going to estimate that total monthly insurance expenses are about $400 per month. If you are fortunate enough to have medical, dental, and perhaps even life insurance through your place of employment, then some of your insurance costs may be taken out on your paycheck. In this case, do not include these costs in your budget as you will only be adding your net income to the budget. Net income is your total income minus taxes and any deductions for insurance, union dues, etc.
Debts
Hopefully you do not have any debts apart from your home, cars, and maybe credit cards (which are all covered in other categories). If you do not, this category can be ignored. But since we frequently hear about young people having a lot of student loans debt, let’s include it for this exercise. Suppose you have $10,000 in debt that needs to be paid back with 4% interest. Further suppose you would like to pay this off over the next five years. To do so will require you to pay $184 per month. Let’s round this to $200 per month.
Personal
If you are married or have a partner, we think it best to divide this category into at least two, one for each partner. Let’s say your names are Jack and Jill. Also, if you have children, we recommend another category named—you guessed it—Children. Again, the money allotted to these categories is for the discretionary spending of the designated person. In the case of children, the parents will want to control the spending in the Children’s category. As these children get older, some of their designated money may be turned over to them, allowing them to make their own spending decisions. Assuming a family of four and allowing for $200 per person per month, that comes to $800 per month total.
Miscellaneous
This budget category is for those expenditures that simply don’t fall neatly into any of the other categories. For instance, a newspaper subscription. Hopefully there will not be too many of these type of costs, but you might be surprised how many of these can crop up in a month’s time. Let’s initially allot $50 per month.
Credit Cards
If you have been frugal and paid off your credit cards each month in full, then you do not need to allot any money to this category. As we mentioned before, whenever a new purchase is made with a credit card, you will simply transfer the money from the appropriate category to the credit card category. Then, at the end of the month, you will have enough money set aside to pay your credit card in full. However, if you are starting out with credit card debt, then you really need to begin allocating money to this column to pay off those debts. Let’s suppose that you owe the credit card companies $20,000 and the average interest rate you are paying is 14%. If you want to pay off these credit cards over the next five years, you will need to make payments totaling $465 per month. Let’s make the decision to allocate $500 per month and pay off the debt in 4.5 years.
Savings
The amount of money going into this category is simply your total monthly income minus the total amount allotted to all the other budget categories. Your goal, however, is to maximize this number as much as possible. If after allotting money to the other categories you find that you are putting a negative amount of money in this category, then something has to change. You will need to modify your lifestyle to live with less so as to reduce the amount being spent. As you pay off your debts, you will find that you can resume some of your suspended lifestyle.
Alright, we now have our initial money allocations for our sample budget. Let’s look at a summary.
Uh-oh. This is not good. Using the initial budget allocations results in us going into the hole almost $800 per month, which is over $9,000 per year. Clearly, some major adjustments need to be made. We’ll do just that in the next post.
Medical
Medical budgeting is difficult simply because one major problem can set you back a lot of money. As with other categories, this one can only be predicted based on past expenditures. However, if you know that a large unusual medical expense is in your immediate future, then be sure to account for it in your budget for the year. Let’s allot $200 per month for now and modify as needed later.
Transportation
Transportation expenses can vary greatly depending on how many cars your family owns and whether or not you still owe money on them. Also affecting these costs are how high your taxes are in your state and how much gas mileage your vehicles get. If you live in the big city and use public transportation, the frequency of use and the distances you must travel will determine much of the amount needed for this category. As we said before, be sure to include money for plane, train, and rental car expenses if you travel away from home frequently. Based on our past experiences, $600 per month is probably a good average number to use. If you like to buy all drivers in your family new cars every few years, then this number won’t even scratch the surface.
Insurance
This category covers every type of insurance you have except for homeowners, which is included in the mortgage category. These are things like homeowners, car, health, life, long-term care, and pet insurance. There are so many types of insurance to help protect you from loss that the cost can quickly get out of hand. Many of the premiums will be paid annually, semi-annually, or quarterly. For each, a calculation must be made to determine what the cost is on a monthly basis. For instance, if you pay $1000 per year for homeowners insurance, that would be $1000/12 or $83.33 per month. One of the most expensive insurance costs is auto insurance for a teenage driver. So, we’re going to estimate that total monthly insurance expenses are about $400 per month. If you are fortunate enough to have medical, dental, and perhaps even life insurance through your place of employment, then some of your insurance costs may be taken out on your paycheck. In this case, do not include these costs in your budget as you will only be adding your net income to the budget. Net income is your total income minus taxes and any deductions for insurance, union dues, etc.
Debts
Hopefully you do not have any debts apart from your home, cars, and maybe credit cards (which are all covered in other categories). If you do not, this category can be ignored. But since we frequently hear about young people having a lot of student loans debt, let’s include it for this exercise. Suppose you have $10,000 in debt that needs to be paid back with 4% interest. Further suppose you would like to pay this off over the next five years. To do so will require you to pay $184 per month. Let’s round this to $200 per month.
Personal
If you are married or have a partner, we think it best to divide this category into at least two, one for each partner. Let’s say your names are Jack and Jill. Also, if you have children, we recommend another category named—you guessed it—Children. Again, the money allotted to these categories is for the discretionary spending of the designated person. In the case of children, the parents will want to control the spending in the Children’s category. As these children get older, some of their designated money may be turned over to them, allowing them to make their own spending decisions. Assuming a family of four and allowing for $200 per person per month, that comes to $800 per month total.
Miscellaneous
This budget category is for those expenditures that simply don’t fall neatly into any of the other categories. For instance, a newspaper subscription. Hopefully there will not be too many of these type of costs, but you might be surprised how many of these can crop up in a month’s time. Let’s initially allot $50 per month.
Credit Cards
If you have been frugal and paid off your credit cards each month in full, then you do not need to allot any money to this category. As we mentioned before, whenever a new purchase is made with a credit card, you will simply transfer the money from the appropriate category to the credit card category. Then, at the end of the month, you will have enough money set aside to pay your credit card in full. However, if you are starting out with credit card debt, then you really need to begin allocating money to this column to pay off those debts. Let’s suppose that you owe the credit card companies $20,000 and the average interest rate you are paying is 14%. If you want to pay off these credit cards over the next five years, you will need to make payments totaling $465 per month. Let’s make the decision to allocate $500 per month and pay off the debt in 4.5 years.
Savings
The amount of money going into this category is simply your total monthly income minus the total amount allotted to all the other budget categories. Your goal, however, is to maximize this number as much as possible. If after allotting money to the other categories you find that you are putting a negative amount of money in this category, then something has to change. You will need to modify your lifestyle to live with less so as to reduce the amount being spent. As you pay off your debts, you will find that you can resume some of your suspended lifestyle.
Alright, we now have our initial money allocations for our sample budget. Let’s look at a summary.
Uh-oh. This is not good. Using the initial budget allocations results in us going into the hole almost $800 per month, which is over $9,000 per year. Clearly, some major adjustments need to be made. We’ll do just that in the next post.
Saturday, November 5, 2011
Allocating Income
We are now going to discuss what is probably the most difficult part of setting up a budget: allocating your income to the budget categories you have determined are right for your family. As you may recall, we suggested the following categories (with credit cards added):
Charity, Gifts, Mortgage, House Upkeep, Home Decorations, Utilities, Communications, Food, Medical, Transportation, Insurance, Debts, Personal, Miscellaneous, Credit Cards, and Savings
What needs to be done now is to decide how much money you plan to spend each month in each of these categories. However, as we have said before, we do not recommend entering expenditures on your budget spreadsheet every month. That is too infrequent. We believe that twice a month works well. It keeps each spreadsheet at a reasonable size, and it is frequent enough to make course corrections should you find yourself overspending in some categories. So, once the monthly allocations are made, these numbers can be divided in half to determine the semi-monthly budget numbers.
For the remainder of this chapter we will allocate money to the above categories based on a made-up household income. Statistics show that the median household income in the US is currently about $50,000 after taxes. So, that is the number we will use for our sample budget. Since it is rare that both spouses have equal incomes, we will assume one spouse clears $30,000 and the other $20,000 just to make things interesting.
What we will do first is make a monthly allocation to each of the budget categories. This is best done by going through past expenses and estimating how much was being spent in these categories, then making initial allocations based on those numbers. If we find that our income is sufficient to support those level of expenditures while still saving a significant amount, then we are golden. If not, then choices will have to be made about where to cut.
If you work a job where the hours are inconsistent, thus causing your income to go up and down over the course of a year, then budgeting will be more difficult. In this case, you must estimate what your total annual income, after taxes, will be and go with that amount. You should estimate on the low side. Then, if your income is actually higher, you will have more money to put in savings. At any rate, let’s still assume that your total estimated household income is $50,000 and get started.
Charity
If you prefer to actually base your charitable contributions on a percentage of your income and you have a job where your income fluctuates a lot, then you may not want to budget a monthly amount for this category. Rather, when you receive a paycheck, you can simply allot money to this item based on how large the paycheck is. This can make it more difficult estimating how to spread your money across the other categories, so we recommend against this if at all possible. Let’s suppose your past giving was about 5% of your income. At a $50,000 income level, that calculates to $2,500 per year or about $210 per month. Let’s start with that amount.
Gifts
Most people like to give gifts to friends and family at special occasions such as birthdays, Christmas, graduations, weddings, or anniversaries. Many people don’t like to be bound by a budget when giving gifts because they want to be able to purchase whatever is meaningful at the time even if it’s a bit expensive. However, if you’re going to manage your money, spending in this category needs to be controlled just as much as in the others. Let’s set an initial budget of $80 a month. If you have large families and lots of friends, you may want to up this if you find out you can afford it.
Mortgage
Since you are probably making a monthly payment on your home loan, this one is easy to determine. It’s whatever that monthly payment happens to be. We are assuming that the mortgage payment includes enough money to cover homeowners’ insurance and property taxes. Let’s suppose the minimum amount you can pay on your house is $500 per month. This is the initial amount to allocate for the mortgage category. If you later discover that you are putting more than enough money into savings, you will probably want to increase the amount you pay on your mortgage. This will allow you to pay it off early and save money on interest. Make sure your mortgage contract allows increased payments with no penalties. Also, keep in mind that you will want to pay off higher interest loans and credit cards before increasing your mortgage payment. It makes no sense to make higher payments on a low interest loan when that money could be used to pay down higher rate loans.
House Upkeep
This category is difficult to determine since it is impossible to predict what repairs might be needed in the course of any given month. But an educated guess can be made based on past expenses. Let’s allocate $100 to begin with. Adjustments can be made as needed in the future. If any unexpected repairs costing lots of money are needed, you may have to use money from savings to cover them. This is why it is good to have a healthy amount of money in savings. It will allow you to handle contingencies without putting you deep in the red.
Home Decorations
This category is a nicety rather than a necessity. Money from it goes towards things to beautify your home. Of course, if your income is too low to cover necessities and niceties, then the niceties need to be eliminated first. So, let’s start with $50 per month, then decrease it later if we find that we simply can’t afford this amount.
Utilities
Although this is a necessary item, it is also one that can be decreased by making adjustments to your lifestyle. The money allocated to this category needs to cover the total cost of electricity, gas, propane, water, garbage collection, sewage, recycling, and anything else of this nature. Basically, any type of service provided to your home by the city and county where you reside. Of course, monthly bills vary by seasons of the year. It’s much more expensive to heat or cool a home in summer and winter than in spring and fall. So, what is needed is an estimate of the yearly cost of these goods and services, then divide that number by 12 to get a monthly amount. Let’s say this number is about $250 per month.
Communications
It seems that just about everybody has a cell phone these days regardless of income. But cell phones make up just a portion of your communications budget. This category also includes land line phones, TV satellite or cable, Internet service, pagers, and anything else that serves a communications need. With all the different services available, this category can require substantial amounts of money. For a family of four, communications costs can easily reach $400 per month. So, let’s use that number.
Food
As we said before, this is the budget category that our family has the toughest time balancing. We all stay pretty busy, so we tend to want to eat out more often than we should. We use restaurant coupons as often as possible as this saves us a lot of money, assuming, of course, the alternative was eating out without a coupon. Even though dining out can be quite expensive, it seems that grocery prices are themselves quite high. We sometimes go into the grocery to get just a few items and suddenly realize that we needed more than we originally thought, and end up spending twice what we expected. Even so, buying and preparing your own meals will, in general, be significantly cheaper than eating out. Randy just recently saw a lady on TV showing meals that can feed a family of four for $5.00. For three meals a day, that is $15 per day or about $450 per month. Most people will want to eat out at least once per week. So, let’s initially allot $600 per month. If you find out you can’t even afford the $5.00 meals three times a day, you may have to plan a lot of PB&J sandwiches and Ramen noodles.
Okay, we are about halfway through the budget categories. In our next post we will cover the remaining categories and see where we stand in relation to monthly income.
Charity, Gifts, Mortgage, House Upkeep, Home Decorations, Utilities, Communications, Food, Medical, Transportation, Insurance, Debts, Personal, Miscellaneous, Credit Cards, and Savings
What needs to be done now is to decide how much money you plan to spend each month in each of these categories. However, as we have said before, we do not recommend entering expenditures on your budget spreadsheet every month. That is too infrequent. We believe that twice a month works well. It keeps each spreadsheet at a reasonable size, and it is frequent enough to make course corrections should you find yourself overspending in some categories. So, once the monthly allocations are made, these numbers can be divided in half to determine the semi-monthly budget numbers.
For the remainder of this chapter we will allocate money to the above categories based on a made-up household income. Statistics show that the median household income in the US is currently about $50,000 after taxes. So, that is the number we will use for our sample budget. Since it is rare that both spouses have equal incomes, we will assume one spouse clears $30,000 and the other $20,000 just to make things interesting.
What we will do first is make a monthly allocation to each of the budget categories. This is best done by going through past expenses and estimating how much was being spent in these categories, then making initial allocations based on those numbers. If we find that our income is sufficient to support those level of expenditures while still saving a significant amount, then we are golden. If not, then choices will have to be made about where to cut.
If you work a job where the hours are inconsistent, thus causing your income to go up and down over the course of a year, then budgeting will be more difficult. In this case, you must estimate what your total annual income, after taxes, will be and go with that amount. You should estimate on the low side. Then, if your income is actually higher, you will have more money to put in savings. At any rate, let’s still assume that your total estimated household income is $50,000 and get started.
Charity
If you prefer to actually base your charitable contributions on a percentage of your income and you have a job where your income fluctuates a lot, then you may not want to budget a monthly amount for this category. Rather, when you receive a paycheck, you can simply allot money to this item based on how large the paycheck is. This can make it more difficult estimating how to spread your money across the other categories, so we recommend against this if at all possible. Let’s suppose your past giving was about 5% of your income. At a $50,000 income level, that calculates to $2,500 per year or about $210 per month. Let’s start with that amount.
Gifts
Most people like to give gifts to friends and family at special occasions such as birthdays, Christmas, graduations, weddings, or anniversaries. Many people don’t like to be bound by a budget when giving gifts because they want to be able to purchase whatever is meaningful at the time even if it’s a bit expensive. However, if you’re going to manage your money, spending in this category needs to be controlled just as much as in the others. Let’s set an initial budget of $80 a month. If you have large families and lots of friends, you may want to up this if you find out you can afford it.
Mortgage
Since you are probably making a monthly payment on your home loan, this one is easy to determine. It’s whatever that monthly payment happens to be. We are assuming that the mortgage payment includes enough money to cover homeowners’ insurance and property taxes. Let’s suppose the minimum amount you can pay on your house is $500 per month. This is the initial amount to allocate for the mortgage category. If you later discover that you are putting more than enough money into savings, you will probably want to increase the amount you pay on your mortgage. This will allow you to pay it off early and save money on interest. Make sure your mortgage contract allows increased payments with no penalties. Also, keep in mind that you will want to pay off higher interest loans and credit cards before increasing your mortgage payment. It makes no sense to make higher payments on a low interest loan when that money could be used to pay down higher rate loans.
House Upkeep
This category is difficult to determine since it is impossible to predict what repairs might be needed in the course of any given month. But an educated guess can be made based on past expenses. Let’s allocate $100 to begin with. Adjustments can be made as needed in the future. If any unexpected repairs costing lots of money are needed, you may have to use money from savings to cover them. This is why it is good to have a healthy amount of money in savings. It will allow you to handle contingencies without putting you deep in the red.
Home Decorations
This category is a nicety rather than a necessity. Money from it goes towards things to beautify your home. Of course, if your income is too low to cover necessities and niceties, then the niceties need to be eliminated first. So, let’s start with $50 per month, then decrease it later if we find that we simply can’t afford this amount.
Utilities
Although this is a necessary item, it is also one that can be decreased by making adjustments to your lifestyle. The money allocated to this category needs to cover the total cost of electricity, gas, propane, water, garbage collection, sewage, recycling, and anything else of this nature. Basically, any type of service provided to your home by the city and county where you reside. Of course, monthly bills vary by seasons of the year. It’s much more expensive to heat or cool a home in summer and winter than in spring and fall. So, what is needed is an estimate of the yearly cost of these goods and services, then divide that number by 12 to get a monthly amount. Let’s say this number is about $250 per month.
Communications
It seems that just about everybody has a cell phone these days regardless of income. But cell phones make up just a portion of your communications budget. This category also includes land line phones, TV satellite or cable, Internet service, pagers, and anything else that serves a communications need. With all the different services available, this category can require substantial amounts of money. For a family of four, communications costs can easily reach $400 per month. So, let’s use that number.
Food
As we said before, this is the budget category that our family has the toughest time balancing. We all stay pretty busy, so we tend to want to eat out more often than we should. We use restaurant coupons as often as possible as this saves us a lot of money, assuming, of course, the alternative was eating out without a coupon. Even though dining out can be quite expensive, it seems that grocery prices are themselves quite high. We sometimes go into the grocery to get just a few items and suddenly realize that we needed more than we originally thought, and end up spending twice what we expected. Even so, buying and preparing your own meals will, in general, be significantly cheaper than eating out. Randy just recently saw a lady on TV showing meals that can feed a family of four for $5.00. For three meals a day, that is $15 per day or about $450 per month. Most people will want to eat out at least once per week. So, let’s initially allot $600 per month. If you find out you can’t even afford the $5.00 meals three times a day, you may have to plan a lot of PB&J sandwiches and Ramen noodles.
Okay, we are about halfway through the budget categories. In our next post we will cover the remaining categories and see where we stand in relation to monthly income.
Wednesday, September 14, 2011
All On Board
When one person is doing something for his own benefit and of his own accord, then he just simply has to decide he’s going to do it and stick to it. So, if you are a single person who has decided that you are mismanaging your money and are having a hard time bringing your spending habits under control, then the information presented here is for you. Following the advice we have laid out can help you get your spending under control. But you do have to make a commitment to lay out a reasonable budget and then FOLLOW IT. Those last two words are the key. FOLLOW IT! Just like any other decisions you might make in life to better yourself, they do no good if you wander off the path you have determined for yourself. If you need to diet to lose weight, then you can’t regularly binge on cookies and ice cream. If you need to lay off the alcohol because you have embarrassed yourself one too many times at “social” get-togethers, then you can’t drink a bottle of whiskey every day. Likewise, if you are spending money faster than your job is feeding it to you, something has to give. It’s time to lay out a plan and FOLLOW IT!
But what if you need to budget for a household? This can potentially be more of a challenge. One person in the household cannot simply decide to create a budget and then tell everyone else involved what to do. The others may not agree with how you have allocated the money. Hey, they may not even agree that a budget is even necessary. If everyone involved is not on board with the budget, then bad things can happen. We have heard of families where one spouse is trying to do the right thing in the way of budgeting, but the other spouse, not seeing the rationale behind it, just keeps on spending in the same way that caused the financial problems in the first place. Even worse, the not-on-board spouse may attempt to conceal his or her spending habits so as not to anger the on-board spouse. Of course, this cannot go on forever. But by the time the on-board spouse discovers the deception, the family budget may be in such dire straits as to take a much longer time to get it back on sound footing. So, it is very important for every relevant person to understand the importance and purpose of having a budget and to be totally on board with actually FOLLOWING IT. These people could be spouses or significant others, but can also include elderly parents living with you or even older children who have been given spending leeway, especially when this involves debit or credit cards.
In upcoming posts we will be explaining why it is important to create a home budget, how to create a budget, and then specifically how to implement it easily using spreadsheet software on a computer. But until you have completed the step just presented, getting everyone on board, then don’t even bother working on the these things. You can read the information so you can make your case for a budget, but setting one up without everyone else being on board will most likely be an exercise in futility.
Okay, so you say you have everyone on board? Good! Let’s get started.
But what if you need to budget for a household? This can potentially be more of a challenge. One person in the household cannot simply decide to create a budget and then tell everyone else involved what to do. The others may not agree with how you have allocated the money. Hey, they may not even agree that a budget is even necessary. If everyone involved is not on board with the budget, then bad things can happen. We have heard of families where one spouse is trying to do the right thing in the way of budgeting, but the other spouse, not seeing the rationale behind it, just keeps on spending in the same way that caused the financial problems in the first place. Even worse, the not-on-board spouse may attempt to conceal his or her spending habits so as not to anger the on-board spouse. Of course, this cannot go on forever. But by the time the on-board spouse discovers the deception, the family budget may be in such dire straits as to take a much longer time to get it back on sound footing. So, it is very important for every relevant person to understand the importance and purpose of having a budget and to be totally on board with actually FOLLOWING IT. These people could be spouses or significant others, but can also include elderly parents living with you or even older children who have been given spending leeway, especially when this involves debit or credit cards.
In upcoming posts we will be explaining why it is important to create a home budget, how to create a budget, and then specifically how to implement it easily using spreadsheet software on a computer. But until you have completed the step just presented, getting everyone on board, then don’t even bother working on the these things. You can read the information so you can make your case for a budget, but setting one up without everyone else being on board will most likely be an exercise in futility.
Okay, so you say you have everyone on board? Good! Let’s get started.
Introduction
Hello everybody and welcome to our new blog. Our names are Randy and Kathy Finch. Back when we got married over 29 years ago, Kathy said she wanted us to start a household budget. Randy was a bit skeptical at first since he had been managing his money as a single guy fairly well without a budget. Fortunately, she was insistent because she had heard that many of the marital problems couples faced were money related. She did not want us to ever have a conflict over money. She wanted us to create a budget and only make changes that we both agreed to. So, Randy finally gave his consent. In the early 1980’s computers were just beginning to make their way into people’s homes. They had very, very little power compared to today’s multi-gigahertz multi-core processors and were quite expensive. So, our initial attempt at a budget consisted of a ledger book, a calculator, and a pencil. It turned out that our concept of how to do a budget was very good, but the pencil and paper implementation was a chore. We can’t tell you how many times our numbers just didn’t match our bank statement. Finding errors in entries or mistaken calculations were a real pain. However, when we eventually did get to switch our budget to a computer, things really got better.
Over the coming weeks we are going to be passing on to you the knowledge and skills that we have garnered over the past 29 years of budgeting. We will also talk about how to set up an easy-to-use spreadsheet to maintain your budget. Even though we now use Microsoft Excel for budgeting, any spreadsheet software will do, even some of the popular free ones. Our first electronic budget was accomplished using Microsoft Multiplan on a Commodore 64 computer. Later we bought a Commodore Amiga computer and switched to a program named Analyze. Then when we bought a PC, we began using Quattro Pro. We finally settled on Excel since it ultimately ended up being the standard spreadsheet software used at our places of work. So, as you can see, home budgeting can be done with limited computer and software power.
We will try to update this blog at least once per week. We will start with the basics of budgeting and build up to using software to accomplish this task. We will also eventually share with you the spreadsheet that we currently use for our personal home budgeting. We think you will find it very easy to use.
Randy & Kathy
P.S. Check out Randy's new novel, "Passion is a Harsh Taskmaster." It's currently available as an eBook at Amazon, Barnes & Noble, Apple iBooks (via iBooks app), and Smashwords.
Over the coming weeks we are going to be passing on to you the knowledge and skills that we have garnered over the past 29 years of budgeting. We will also talk about how to set up an easy-to-use spreadsheet to maintain your budget. Even though we now use Microsoft Excel for budgeting, any spreadsheet software will do, even some of the popular free ones. Our first electronic budget was accomplished using Microsoft Multiplan on a Commodore 64 computer. Later we bought a Commodore Amiga computer and switched to a program named Analyze. Then when we bought a PC, we began using Quattro Pro. We finally settled on Excel since it ultimately ended up being the standard spreadsheet software used at our places of work. So, as you can see, home budgeting can be done with limited computer and software power.
We will try to update this blog at least once per week. We will start with the basics of budgeting and build up to using software to accomplish this task. We will also eventually share with you the spreadsheet that we currently use for our personal home budgeting. We think you will find it very easy to use.
Randy & Kathy
P.S. Check out Randy's new novel, "Passion is a Harsh Taskmaster." It's currently available as an eBook at Amazon, Barnes & Noble, Apple iBooks (via iBooks app), and Smashwords.
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