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My March Personal Budget Review

by MoneyNing


I figured I will post my March personal budget sheet up for your review today. As you can see, this is a very simple spreadsheet. However, after a few months, I can look at how much I spend on the different categories and adjust accordingly if anything goes out of normal too much. Notice that I break these down to the cent, which I found not many people do because it is deemed a waste of time. I have seen some of the budgeting spreadsheets by my friends, and let me tell you the importance of being exact.

For example, I have seen one where instead of putting down the exact money he gets from his paycheck every month, he puts 1500 x 2 = 3000. The problem here is that his paychecks are bi-weekly at $1492.12 per pay check, so most months he is short on his calculation and 2 months out of the year he is actually missing one whole paycheck since he gets 3 checks 2 months out of the year. Another area where approximation is no good is with your expenses. If you don’t put down every bill you pay, you end up missing many which totally defeats the purpose of budgeting. Approximation is no good because if you always put $10 for those $8.73 bills, your total will be off by more than 10%.Looking at the spreadsheet closely, some of you might wonder why there is no utilities bill or why it seems like I don’t have to eat everyday. It is because I live with my girlfriend and we agreed that I will pay for the rent while she pays for all the utilities bills, as well as the grocery bills so we can eat at home at times (most of the time). The benefits are that we don’t always have to ask each other for money (which is always a sensitive subject).

So why should you budget? Just remember that knowledge is a very powerful tool. The only way you will know where your money is going is to keep track of how it is spent. You can see that budgeting can be as complicated as buying Microsoft Money or setting up a simple spreadsheet like the one I have. However, without data, it is very hard to do analysis of your spending when you do find the time. To be honest, I don’t spend much time on analysis where I spend my money since I have so little expense, but let me tell you that when my expenses gets higher one day, I can trace all the way back and figure out what the differences are. Again, data is what allows you to do analysis, and knowing is the first step to the fix.

It is important to have an ability to do a comparison between your current expense versus your average expense. You can also look at your expense and just ask yourself to spend less in a certain category if you see that you are spending way too much on certain things (food for example). Challenge yourself to figure out ways to reduce your expenses, and watch your net worth grow.

Tagged as: Advice

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