Comments on: How To Track Your Expenses http://millionairemommynextdoor.com/2010/01/tracking-expenses-for-budget/ A self-made millionaire shares her recipe for success, happiness and financial freedom Wed, 01 Sep 2010 02:32:15 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Mule Skinner http://millionairemommynextdoor.com/2010/01/tracking-expenses-for-budget/comment-page-1/#comment-3035 Mule Skinner Mon, 15 Feb 2010 20:48:54 +0000 http://millionairemommynextdoor.com/?p=1283#comment-3035 Automobile expenses: primarily insurance, fuel and maintenance since there is no debt on them. Kid costs: piano lessons (huge!), school activity fees, school lunches, figure skating lessons. Food. Taxes. Utilities. (No mortgage, no loan interest) Automobile expenses: primarily insurance, fuel and maintenance since there is no debt on them.

Kid costs: piano lessons (huge!), school activity fees, school lunches, figure skating lessons.

Food.

Taxes.

Utilities.

(No mortgage, no loan interest)

]]> By: Jenn http://millionairemommynextdoor.com/2010/01/tracking-expenses-for-budget/comment-page-1/#comment-3032 Jenn Sun, 14 Feb 2010 02:19:32 +0000 http://millionairemommynextdoor.com/?p=1283#comment-3032 I use an Excel spreadsheet also. Nothing fancy, just a row for every transaction (expense or payday) with a running balance beside. I plan out the entire year in advance so on January 1st I can see that if I stick to the plan I'll have $x at December 31st. It's actualy very easy to predict a year's expenses since most of the money spent is not a surprise. I enter the same amount every week for groceries, gas, and a tiny bit of cash for miscelaneous. Then I add in extra rows in the first week of every month for property taxes, electricity, internet and insurance. Our phone and cell bill is always due the third week of the month so I add a row in that week for each month. Life insurance comes out automatically on the 17th or next business day, so I all a row for that in the correct week of each month. My DH and I are paid every two weeks on alternating weeks. I add a row in every week and alternate between labelling that row as Payday - his and Payday - hers and plug in the appropriate amounts. The mortgage is autopaid every other Monday, so I add a row in every week for that amount. Once all the regular weekly and monthly expenses are listed I check the prior year's history and a little list I keep of annual expenses that I need to include only once in a specific week or month of the year (eg. annual vet bill, saftey deposit box fee, licence tags, school photos/yearbooks etc. Now I have a good picture of what we will likely spend and earn for the entire year and can easily see if we will run into any problems in the future. If I want to make an extra mortage or retirement savings contribution I can just put in an amount and look down the rows into the future to see the impact. We have cut our regular expenses to the minimum and our normal, predictable expenses above take 55% of our take home pay. Everything above that is diverted to extra mortgage payments and retirement savings most of the time. In fact every Friday I update the predicted amounts with the actual numbers (from our bank account and online VISA account). Then I assess the maximum I can safely skim off and send to the mortgage/retirement accouts. Occasionally we reduce or skip those transfers and let the excess pool up to pay for a trip, vehicle replacement or other unusual expense (major appliance, car repair). Because we are fortunate enough to have an excess coming in every week we don't budget weekly or monthly for things which happen very infrequently. If we need to put new tires on the car, repair the diswasher, outfit the kids with school clothes etc we just reduce or cancel the weekly transfer of the excess for a week (or many weeks for big items). When my DH's SUV decided to retire itself (at age12) he drove my car for a few months and I worked from home. By the time he'd found a new(er) replacement he was happy with 5 months had passed and enough cash had piled up to buy it outright. When our dishwasher unexpectedly failed we washed dishes by hand for 3 weeks while shopping around for a replacement. We paid cash for the replacement. We've considered having an emergency fund set aside for these type of expenses, but this system seems to be working for us. Yes we both make decent salaries, but we used to spend to the limit of our means (and then some at times). Now we've pared down to what is really necessary and that leaves a lot of excess we can use to pay off the mortgage and pad the retirement funds. We've decided retiring early while still taking some great holidays in the meantime is more important than cable/satelite, restaurant meals, new vehicles, extensive trendy wardrobes or monster TVs. Yes their all great, but just not our priorities. Doing what is important to you rather than keeping up with the Jones's sure makes it easy to see where to spend your dollars. In my weird little world, I happily buy used cars, second hand clothing, marked down groceries and then run off to Europe for a month with the kids every other summer and count down to our early retirement in December 2020. I use an Excel spreadsheet also. Nothing fancy, just a row for every transaction (expense or payday) with a running balance beside. I plan out the entire year in advance so on January 1st I can see that if I stick to the plan I’ll have $x at December 31st. It’s actualy very easy to predict a year’s expenses since most of the money spent is not a surprise. I enter the same amount every week for groceries, gas, and a tiny bit of cash for miscelaneous. Then I add in extra rows in the first week of every month for property taxes, electricity, internet and insurance. Our phone and cell bill is always due the third week of the month so I add a row in that week for each month. Life insurance comes out automatically on the 17th or next business day, so I all a row for that in the correct week of each month. My DH and I are paid every two weeks on alternating weeks. I add a row in every week and alternate between labelling that row as Payday – his and Payday – hers and plug in the appropriate amounts. The mortgage is autopaid every other Monday, so I add a row in every week for that amount. Once all the regular weekly and monthly expenses are listed I check the prior year’s history and a little list I keep of annual expenses that I need to include only once in a specific week or month of the year (eg. annual vet bill, saftey deposit box fee, licence tags, school photos/yearbooks etc. Now I have a good picture of what we will likely spend and earn for the entire year and can easily see if we will run into any problems in the future. If I want to make an extra mortage or retirement savings contribution I can just put in an amount and look down the rows into the future to see the impact. We have cut our regular expenses to the minimum and our normal, predictable expenses above take 55% of our take home pay. Everything above that is diverted to extra mortgage payments and retirement savings most of the time. In fact every Friday I update the predicted amounts with the actual numbers (from our bank account and online VISA account). Then I assess the maximum I can safely skim off and send to the mortgage/retirement accouts. Occasionally we reduce or skip those transfers and let the excess pool up to pay for a trip, vehicle replacement or other unusual expense (major appliance, car repair). Because we are fortunate enough to have an excess coming in every week we don’t budget weekly or monthly for things which happen very infrequently. If we need to put new tires on the car, repair the diswasher, outfit the kids with school clothes etc we just reduce or cancel the weekly transfer of the excess for a week (or many weeks for big items). When my DH’s SUV decided to retire itself (at age12) he drove my car for a few months and I worked from home. By the time he’d found a new(er) replacement he was happy with 5 months had passed and enough cash had piled up to buy it outright. When our dishwasher unexpectedly failed we washed dishes by hand for 3 weeks while shopping around for a replacement. We paid cash for the replacement. We’ve considered having an emergency fund set aside for these type of expenses, but this system seems to be working for us. Yes we both make decent salaries, but we used to spend to the limit of our means (and then some at times). Now we’ve pared down to what is really necessary and that leaves a lot of excess we can use to pay off the mortgage and pad the retirement funds. We’ve decided retiring early while still taking some great holidays in the meantime is more important than cable/satelite, restaurant meals, new vehicles, extensive trendy wardrobes or monster TVs. Yes their all great, but just not our priorities. Doing what is important to you rather than keeping up with the Jones’s sure makes it easy to see where to spend your dollars. In my weird little world, I happily buy used cars, second hand clothing, marked down groceries and then run off to Europe for a month with the kids every other summer and count down to our early retirement in December 2020.

]]> By: Good Reads for the Weekend http://millionairemommynextdoor.com/2010/01/tracking-expenses-for-budget/comment-page-1/#comment-2909 Good Reads for the Weekend Sat, 09 Jan 2010 16:05:42 +0000 http://millionairemommynextdoor.com/?p=1283#comment-2909 [...] Millionaire Mommy Next Door: How to Track Your Expenses [...] [...] Millionaire Mommy Next Door: How to Track Your Expenses [...]

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