Wed, 23 Oct 2024 16:09 UTC
It was high time that I did some forensics on my finances.
I know my income and I know my general expenses but where is each penny going? What is each and every penny doing? What is my disposable income and what portion of my income is available to save and invest?
I had many questions and at the beginning, when I set off to get to grips with my money, I had a vague idea but not a definite answer to any of those questions.
It all happened in September 2024 and with just over one-quarter of the year remaining, I thought it was time to get organised.
You don’t know what you don’t track
As the famous saying goes. And that is exactly what my aim was…to track each and every penny to know exactly where it comes from and where it goes. Only then can I have a better picture of how to:
- manage,
- forecast,
- invest.
After all, if one takes care of the pennies, the pounds will look after themselves.
The budget
Spreadsheet at the ready, I started tracking everything on September 12th, 2024. LibreOffice Calc will do just fine for this exercise.
I opted to use one sheet for accounting and another as a dashboard so that I can — at all times — have an overview of where I am. I grabbed the data from the preceding days in September and populated my sheet, starting on September 1st, 2024.
The Data
Sticking to the classic double-entry accounting system, I must debit and credit, where possible. Paying a bill is only a debit but moving money from one account to another has both debit and credit entries.
I also prefer to use positive numbers in the credit column and negatives in the debit column.
Since I’m starting on September 1st, 2024, the first few rows of the data table are filled with credits to indicate the current balances of my current and savings accounts. Here is an illustration:
| DESCRIPTION | DEBIT | CREDIT | ACCOUNT | DATE |
|---|---|---|---|---|
| OPEN | 250.00 | current | 2024-09-01 | |
| OPEN | 300.00 | save_1 | 2024-09-01 | |
| OPEN | 350.00 | save_2 | 2024-09-01 | |
| bill one | -75.18 | current | 2024-09-02 | |
| bill two | -12.56 | current | 2024-09-03 |
The Dashboard
I made a simple dashboard to track each account.
On a sheet called “Dashboard”, the formula to track the balance of my current account from the sheet called “DATA” is:
=SUMIF(DATA.$D$2:$D$2001,"current",DATA.$B$2:$B$2001)+SUMIF(DATA.$D$2:$D$2001,"current",DATA.$C$2:$C$2001)
And the same applies to the two savings accounts as per my above example.
My spreadsheet is complete; it is my tool to track. Next, I desperately need to actively manage my finances.