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DIY Personal Finance - Tracking Your Spending Plan

December 5, 2019

After you have made a plan for your money, the next step is to track the plan.  I absolutely love using Google Sheets on my laptop to create my plan and the Sheets app (also by Google) to track my plan on a daily basis.  I love using Sheets because it’s free, and I can access my budget from anywhere.

Create Your Plan

Your plan is essentially an analysis of the money that you expect to earn and what you intend to do with those earnings. For simple illustrative purposes, a net income of $2,500 per paycheck and allocations of $100 per category will be used. If you choose to use this method, replace the income amount with your actual net income, and update the allocations based on their due dates.  See my previous articles, specifically Personal Finance is Personal and Bill Management: Your Job Giveth, and Bills Taketh Away, for a more in-depth discussion about structuring and managing bill payments by their due dates.

 

 

In order for you to see if the plan that you made is realistic for yourself, you have to track it.

 

Tracking Option #1 - The Lump-Sum Lover

Some people prefer to know how much they can spend overall and are not overly concerned with tracking categories.  If that describes you, then the following tracking method may work for you. 

First, list all of the allocations in the plan that are mandatory for that pay period (e.g., bills, debt payments, etc.) and the allocations for which you consider the amount to be set in stone.  In the example below, I included savings, investments and giving with the mandatory allocations because those are things that are mandatory for me. After listing the mandatory allocations, a lump-sum of $500 remains to be spent.  The $500 is essentially the sum of the clothing, groceries, entertainment, dining out and transportation lines on the plan.  While these five categories are mandatory in the sense that they happen each pay period, the amount spent in these categories is often variable.

Update the sheet as you make purchases.  The example below illustrates how you would record a purchase made at Zara on 1/19/2020 in the amount of $45.18. 

After this purchase, the lump-sum available to spend is now $454.82.

Continue to update the sheet as you make purchases.  If you want to know where you stand before making a purchase, just open the sheet and take a look at your remaining balance.  The goal is for the remaining balance to be either a positive number (meaning that you spent less than you intended) or for the number to be $0 (meaning that you spent exactly what you planned).  If the remaining balance is a negative number, that means that you overspent and most likely have an overdraft on your account.

If there is still a remaining balance when the 1/31/2020 paycheck arrives, enter that amount on the "Excess Income from Prior Pay Period" line of the plan for the 1/31/2020 check. If the remaining balance is a negative number when the 1/31/2020 paycheck arrives, enter that negative amount on the "Excess Income from Prior Pay Period" line of the plan for the 1/31/2020 check.

Create a new tab (or copy the 1/15/2020 tracking tab and update the amounts) to track your spending of the 1/31/2020 check. Rinse and repeat.

Tracking Option #2 - Show Me The Details, Sis!

If you prefer to track your spending by category, the following tracking option may work for you. 

 

In the example below, the same five variable categories noted in tracking option #1 are now listed separately.

 

Here's how you would record the purchase made at Zara on 1/19/2020 in the amount of $45.18:

 

The purchase would be recorded in the clothing category since Zara is clothing store.  After this purchase, the amount available to spend on clothing is now $54.82. Each of the other categories still have $100 left to spend.  Continue to update the sheet as you make purchases.  If you want to know where you stand before making a purchase, just open the sheet and take a look at your balance for the respective category.

Similar to tracking option #1, the goal is for the remaining balance to be either a positive number (meaning that you spent less than you intended) or for the number to be $0 (meaning that you spent exactly what you planned to for that category).  If you do overspend in one category, you have that much less to spend in the other categories.  For example, if you spent $150 on clothing instead of the $100 that you planned for, subtract $50 from one of the other categories.


If the sum of all the remaining balances is a positive number when the 1/31/2020 paycheck arrives, enter that amount on the "Excess Income from Prior Pay Period" line of the plan for the 1/31/2020 check. If the sum of all the remaining balances is a negative number when the 1/31/2020 paycheck arrives, enter that negative amount on the "Excess Income from Prior Pay Period" line of the plan for the 1/31/2020 check.

Create a new tab (or copy the 1/15/2020 tracking tab and update the amounts) to track your spending of the 1/31/2020 check. Rinse and repeat.

You can access the example used in this article at https://docs.google.com/spreadsheets/d/1t6vcO5_4XmA1WSYUzim-VwntWT7yW_BrB2C4vBMCxrs/edit?usp=sharing.  Stay tuned next post in the DIY Personal Finance series - tracking your credit card expenses and payments.


Zikora is a Certified Public Accountant (CPA) by day.  When not assisting and advising clients, she can be found writing, singing, songwriting, exercising, cooking, and or plotting her next move.  She is a sounding board for friends and family and enjoys showing people that they can indeed do things that they believe to be difficult or impossible. Send questions and/or topics that you would like Zikora to cover in future articles to naijacpa@gmail.com. 

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