No doubt about it, budgeting and cash flow tracking are the most tedious parts of getting your finances in order. Tedious, but unfortunately, necessary. I simplify my tracking process by ignoring as much of my money as humanly possible.
What does that mean? It means I have a budget category called “already spent” that is comprised of all the monthly and annual bills that I can’t avoid. Mostly, it’s the bills that stay the same every month (i.e: mortgage, insurance, property taxes, annual vehicle registrations, etc.). I budget for them separately, using Excel (see my Excel video series for step-by-step instructions), and then I roll them all up into one category. The amount of money in that category is “already spent”, so the only money I need to actually track daily are the variable spending categories that are left (i.e: clothing, groceries, gas, entertainment, etc.).
I do put the hydro and heat expenses in the “already spent” category, even though they can fluctuate, but when I’m making my new budget each January, I pad them by about $100-$300 over what I spent in the last year to make sure that each pay period, enough is accumulating in my account to cover those payments.
I automate as many of those payments as possible and when the bills come in for the others, I just pay them and rest assured the money’s there to cover them.
Watch my newest Excel video to see how I use the “already spent” category.
For better viewing: click on the YouTube icon in the bottom right hand corner of the video’s window.