Everyone has a different method of tracking their finances and budgeting. The only wrong way to do it, is to not do it at all. Here is a method that works for me.
I use Google Docs’ spreadsheet to coordinate all my finances. Since it is a cloud-based solution, I can access it from any device that has an internet browser (smartphone, tablet, home PC, work PC, etc.). All you need is a Gmail account and it is FREE.
By having all my bills organized in one place, I never miss a payment. Gone are the days when I forget to send in the utilities bill and next month I owe twice as much as normal or I’m late on my credit card bill and I get hit with a late fee (some lenders jack up your APR to an outrageous 25-30% percent, just for a single late payment).
I list out all of my monthly and periodic bills with their amount, due date, last paid date and a note column. This makes for easy reference each time I need to plan out budgeting for a particular month. Following this is a guesstimate of my other monthly expenses such as groceries, gas, medications, pet food and savings.
Some bills are not due every month. Let’s use my pest control company as an example. They service my house once every three months. On my spreadsheet, I divide that cost by three to come to a monthly amount. I don’t save this amount of money from month to month, but knowing that it factors into the budget helps greatly.
I automatically subtract the biweekly payments for my student loan, both auto loans and our mortgage from my incoming money from each paycheck and then plan my bill paying according to the remainder. I forecast my budget out by three months which allows me to plan for larger purchases.
I total all my expenses and subtract it from my monthly pay. This remainder, divided by four, is what I get to spend each week on going out to eat, entertainment, ‘fun’ purchases, etc. For ease of use, I assume that one month equals four weeks. I get paid every two weeks, close enough.
I share this document with my wife. She’s able to update it when she makes payments or has new bills to add to the budget. We’re both able to spend within our budget since it’s a living document that we both can access at anytime, from virtually anywhere.
I’ve set up most of my bills to auto-draft from my checking account. As long as I keep up with budgeting and sticking to it — there’s no surprises. Sometimes companies will offer some sort of incentive to use their auto-pay feature. Take advantage of these when and if you can.
There’s countless Apple and Android apps that can help you structure a budget. The most popular is called Mint. I’ve found that these require more work than a spreadsheet.
Since Google Docs exists in the ‘Cloud’, you should be careful not to store any sensitive data such as social security numbers, credit card numbers, etc. (Not to mention viruses and malware such as ‘keyloggers’ that can steal your info). Be careful. Be smart. There are many free templates on the web too, here are three for starters: