Wednesday, May 6, 2009

Money Tracking and Management

I didn't do very well at tracking my expenses in April.

It may have been because I was traveling for a week or because I was busy or, well... whatever. Those are all excuses, really. The fact of the matter is simply that last month I did not do a good job of updating my budget. Typically, what I do is check my online banking account each day and then add the figures into my spreadsheet. That gives me a running total. Last month? Not so much.

For some of my bills, a running total doesn't really matter. Basically, anything I pay monthly, quarterly or semi-annually is a fixed expense. Mortgage, car loan, even utilities are all fairly fixed expenses. Sure, utilities might go up or down a bit from month to month, but once that bill from the electric company hits there isn't much you can do but pay it. (And install some cfls so your bill is less the following month.) The budgeting categories that I need to track continually throughout the month are the ones that are made up of multiple purchases - which also happen to be the ones I have the hardest time with. These are things like groceries, dining out, gifts, home improvement, and that dreaded "misc." category. These are places where I occasionally go over, but also areas that with a little planning, I can really save money.

And that is why it is important for me to add in these expenses within a day of when they happen. For one thing, it lets me see how much money I still have available in that category, and for another, if I don't do it right away, I'll forget. Once that happens, it is too late...

It is already too late for April. I may have come in under budget, I may have ended up over. I don't know. I do know I made my goal for the month in income, but I don't know about the expenses. Now, I can fix that. I simply need to print out my April bank statement and go through it and update my budget. Since I pay all my bills with online banking and I pay for almost all purchases with my debit card, I'll be able to go back through and add up where the money went. However, it is already too late to change any of it. What is spent, is spent.

I'm not beating myself up, this stuff happens. I will look at the statement and fix my spreadsheet. The point though, is this was a real reminder of why I need to update my budget every day. I know some people who only do it once a month and others who sit down with their receipts once a week - and if that works for you, great! Everyone has their own system. Me? I do it daily. It takes me less than 10 minutes and gives me peace of mind. That way I pretty much always know day to day if there is room in the home improvement budget for those sale priced perennials or whether I need to scrimp on the grocery budget and forgo that bottle of wine.

Now that it is May I am going to be completing a completely new budget for June. After one year on my current budget I have found a few things that need tweaking. A lot of changes have happened over the last year, and I need to incorporate them in the working budget. I will be sure and keep you all in the loop on how the new budget pans out!


Photo by: LotusMonger

4 comments:

Kari said...

I can't wait to hear what you've tweaked for your budget.

Good on you for just getting right back up and recongnizing what you did and just resolving to do better.

Dawn said...

Thanks Kari! You too - I think you are headed down the same road of picking yourself up and having that resolve to do better!

Andy @ Retire at 40 said...

Yeah, taking stock of your situation and adapting it regularly is the way to go. No point thinking you have it right and continuing the same way if it's wrong.

Good luck with the new budget!

Dawn said...

Thanks Andy!