Wednesday, January 13, 2010

Budget Planning with Excel

I spent New Year's Day gearing up to track the family finances. Since the beginning of our marriage, Mrs. Chaka and I have used an Excel spreadsheet for this purpose. I was planning to migrate to something more fully featured, such as GNUCash, but after playing around with that program for a bit, I felt that a couple modifications to Excel would serve us better. This is because I'm lazy and didn't want to learn a new system.

Now, credit where credit is due: Mrs. Chaka started our budget, using a system she learned from her mentor Jason Falck. Any blunders I've introduced should be laid at my door, of course, not theirs.

You may have heard of Dave Ramsey's envelope system: You put the budgeted cash in an envelope and when the money for that category is gone, it's gone. Our system is like that, except we use Excel columns instead of envelopes. There's a Gas column, a Groceries column, a Rent column, etc. When we make a payment from our credit card or bank account, we deduct the money from two columns--the account and the budget category. E.g.,

On the 5th of January there, the $24.86 we spent at Valli Produce (The Platonic Ideal of a Grocery Store) was deducted from our credit card (USAA) and from the Groceries column.

One of the reasons Mrs. Chaka and I both dreaded working on the budget in the past was the time it took to enter every expenditure twice--sometimes more than twice, since we often needed to use comments to make notes about the transaction.

My goal on New Year's Day was to hack Excel to reduce the number of times I have to enter the same information. In the next few posts, I'll share my results.

No comments: