Way back when I got my first job, first apartment, first car, etc., I felt quickly overwhelmed by the financial responsibilities of adulthood (“How does anyone keep track of all of this?!”). It was so easy to lose track of where my money was going each month, so I ended up overspending and really stressed.
After a number of years of playing with different tools and systems to keep track of my finances, I developed a monthly tracking system. It’s basically a personal cash flow statement, if you want to use accounting lingo. At the beginning of each month, I go back through my accounts and input how much money came in and money went out using a simple spreadsheet. It usually takes about 30 minutes and gives me a quick snapshot of my finances, as well as helping tremendously with long-term goals and planning.
(Side note: In recent years, I’ve also begun using Mint.com to track my finances, but it has limitations that frustrate me. If you are looking for a more in-depth and customized tool, then the spreadsheet I’ve provided could help. But if the spreadsheet looks too daunting, it’s totally fine to use a service like Mint. Tracking in any way is great!)
This tracking system has been so helpful for me that I wanted to share it with you. I’ve included a blank template of the spreadsheet I use and will give you an overview of how to get started (see below). Then, I’ll post an update at the beginning of each month. I hope you’ll keep track, too, and let me know how you’re doing!
Click here to download: Personal Finance Worksheet Template
Start by downloading the Personal Finance Worksheet template (see link above). You can open it in Excel or Google Docs (although sometimes the formatting can get funky in Google Docs). Don’t freak out! It looks intimidating, but I’ll walk you through it.
- You will see spending categories are on the left, months are along the top, and totals run along the bottom and far right side (after December). The rows highlighted in colors are locked, as they contain formulas you won’t to change accidentally. (If for some reason you need to unlock them, go to Review > Unprotect Sheet in Excel.)
- Take a minute to look through the categories on the left. Are there any that don’t apply to you? Are there any missing you know you’d like to track? Add or remove categories to fit your specific needs by inserting or deleting rows. You can always add or remove categories as you go, too. Life changes!
- Along the top, you will see there are two columns for each month – one has grey italic text and the second has green text. The grey text column is for your budget amounts; you will input your actual spending amounts in the green text column.
- The first step to tracking and budgeting is to input your spending data. If you spending mostly using cards (instead of cash), you can go back through 2-3 months of statements and input this data. To do this, start with a printed copy of all of your statements for one calendar month. (Note: Many credit cards have mid-month billing cycles, so you may need to print two consecutive statements for each calendar month.)
- Beginning with the top category, “Housing and Utilities,” go through your statements and input your actual data in the green “Actual” column for the corresponding month. Check or cross off that item on your paper statement after you enter it. As you go down the list, many categories will have multiple entries, so you may want to highlight them all on the statements ahead of time and enter them all at once.
For example, I went to the grocery store nine times in January. After I’ve highlighted all of the grocery line items on my statements, I go into the “Actual” cell for groceries in January and enter it like this:
Excel will automatically calculate the total when I hit enter.
- The spreadsheet will automatically calculate your totals in each category, plus the totals on the bottom and at right.
- After you have 3 months of data entered, you can start to enter budget amounts. For some categories, like a car payment, you may have a set amount each month you pay. You can go ahead and plug those numbers in for the whole year in the grey “Budget” columns for each month. Other types of expenses will vary each month, so use the 3 months of “Actual” data to estimate a monthly budget amount.
For example, I spent $157, $243, and $195 on “Restaurant/Bar” in January, February, and March, respectively. Therefore, I might estimate an average budget of $200/month for that category.
- Make sure to save the file with the year in the filename (“Poppy Finance Spreadsheet 2014.xls”), so you can easily find and reference it later.
- Now go drink a glass of wine – that was a lot of work!
Next month, I’ll talk more about how to analyze the data you’ve entered and make adjustments as you go. In the meantime, please let me know if you have questions or comments below. I’d love to hear your thoughts!