Setting up a personal finance worksheet is simple, but can have a powerful effect on your finances.

I've been using Microsoft Excel spreadsheets for many years. Many computers come with Excel as part of Microsoft Office. If you are an Apple MAC user, you will be able to find software with similar functions.

BEFORE YOU START

So you have your blank worksheet open and you're ready to go. Take some time out to plan first.

The objective of the worksheet is for you to break down your income and expenditure per month and per year. So you need to think things out a bit first and write down a list of the following:

1. Income

Obviously, this will be salaries, wages, casual work, interest on savings.

2. Expenses

Divide your expenses up into two main group: Fixed recurring expenses; everything else

Fixed recurring expenses will be, for example, mortgage, loans, utilities. These are the expenses that you know you can accurately predict because you know when and how much they cost you each month.

Other types of expenses will vary each month. These will typically be: groceries, car, clothes, cosmetics, vacation and don't forget those occasional larger capital expenses such as furniture and decorating. I have about 25 different categories. You need to find a happy medium between having too many and too few.

You may wish to create a few sub-categories, an example is car expenses. You can break this down as: gas, tax, insurance, servicing, parking, sundries. I f you have more than one car in the family, as many do, then you can repeat this for each car! You'll soon see who's draining the family budget!

Other ideas for sub-categories are clothing (each household member), insurance (life, health, house etc.).

SETTING UP THE WORKSHEET

You've now done the hard part, the rest is pretty simple and just involves typing and then totaling to create what I would call a simple financial model.

In the first column, first row just type "CATEGORY". Now type your income categories in the first column beginning on the second row.

Next, you need a total for all the income categories, so type "TOTAL" in the first column beneath all the income categories.

Next, you need to do the same for all the fixed expenses and you may want to allow for a total for these too.

If you have decided to use sub-categories, don't forget to allow for a Total row.

Now across the top of your worksheet in the first row type the months of the year. I would suggest, "JAN-08", "FEB-08" etc.

You will

• 1
• 2
• next page >>

---

Add your voice

Know something about How to set up a personal finance worksheet?
We want to hear your view. Write now!