Over the past two days, I’ve been working on an annual financial review and budget planning. It’s not a fun way to spend a day or two, but it was needed.
The first thing I did was evaluate all sources of income, all non-negotiable spending, and then all additional spending. The first step is to know what you have and where it’s going. I even made entries for automated payments as small as 2 dollars a month!
After that, I thought about what I needed to create and stick to a budget. I ended up with a 3 part system using a spreadsheet with 3 different sheets (or tabs).
- Actual Transactions – A spreadsheet for what is actually coming in and going out, and a total of what I have. There are several categories for spending, and each row is a specific week. The weekly category entry can be updated as the week goes on, and the totals update.
- Bills Due – The second sheet on this spreadsheet is a list of every bill in order of the date due, the bill amount, and a space to note when it’s paid each month.
- Envelope System – The third sheet is a digital version of the envelope system. It’s a way for me to see what’s available in my checking account for different categories. This helps to know what purpose I have set aside specific amounts for.
I might need to adjust things later, but I think this is a great start to keep on track with a budget this year.