Income and Expense categories are the designations that enable totals to be identified and grouped. In our Pagemonth Budget spreadsheets the broadest category designations divide into the 500's for Income and the 100's for Expenses.
Income (any amount that increases the home checking account balance) is further broken down as coming from the User, Spouse, or Other sources.
Income 501 (User's Income) includes regular or occasional payments to the budget's owner such as salaries, commissions, bonuses, social security and pension fund deposits.
Income 502 (Spouse's Income) includes regular or occasional payments to the user's wife, husband. or partner such as salaries, commissions, bonuses, social security and pension fund deposits.
Income 503 (Other Income) includes deposits into the home checking account from any other source, such as rebates or refunds, gifts, and checking fee adjustments, or income from miscellaneous sources.
Expenses (any amount that decreases the home checking account balance) are broadly grouped in our budgets into Regular, Other, or Charged.
Regular 101-119 Expenses include monthly or periodic payments for savings accounts, housing, food, clothing, phones, utilities, home maintenance, insurance, cash, credit providers, and loan payments,
Other Expenses 120-129 are paid occasionally, not monthly or periodically, including recreation, gifts, medical, professional, clothing, repairs, maintenance, gas and oil, tolls, and interest fees. They are paid by cash, check, or debit card.
Other Expenses 130-140 include occasional deferred payment charges, including recreation, gifts, medical, professional, clothing, repairs, gas and oil. and tolls. They are paid to credit card providers.
All of our spreadsheets provide an Other Expenses/Charges Summary box on the budget, right-
hand side of each month page, just above the bottom Summary, which totals these items for that month.
Categories are used only on the budget side and do not appear on the cashflow, left side of our spreadsheets. They do, however, appear for each income, expense, and charge category in columns E and F as updating, annual totals to the nearest dollar. And they are finally grouped once more on our Summary Page to the right of January's data.
Pagemonth Budget users may modify any cells, categories, or formatting of any items in our spreadsheets for their individual needs or uses once purchased in Excel or MSWorks versions, available at the bottom of our homepage,. The only thing they are prohibited from is selling them, as our designs and formats are protected by copyright.
Tuesday, April 30, 2013
Saturday, April 20, 2013
Finding and Fixing Errors
Pagemonth Budget Spreadsheets all have built-in safeguards against carrying errors forward from either the Cashflow or the Budget side, the main one being the need for the twin end balances to agree to the penny.
Yet errors do occur, and it is possible to carry them forward from any given month where they occur to subsequent months, even for all remaining months of the year, which may display twin end balances in perfect agreement even though the original month in error displays disagreement between its end balances!
How is this possible? It depends upon three things: where the errors are, the amounts entered, and whether they were repeated on both cashflow and budget sides. Let's take these one at a time:
First, errors made on only the Cashflow side are the easiest to locate and correct, because nothing in cashflow is carried forward to tthe next month or beyond, including its End Balance, which will likely.not agree with the Budget side End Balance. That is because the Budget side End Balance is the amount each month that is duplicated automatically as the next month's Beginning Balance, which is in turn added to or subtracted from with each Cashflow row entry. The error in the previous month's cashflow is therefore not carried forward from month to month in column D balances, and may not even be noticed in future months.
To locate a Cashflow error, however, is very easy. because it produces a column D balance that is also wrong, To find and correct it simply look for the differnce between the twin End Balances. which will be the amount of the error, then check what the amount should have been by glancing at its correct amount on the Budget side--again displaying the difference discrepancy amount. Once the error is corrected the End Balances should agree again and you can gi forward.
As for Cashflow errors in amount entered, if the amount is correct, look at its column D formula to make sure it was added or subtracted by the correct operand sign internally. either + or -. The wrong sign will of course produce the wrong balance. Also check to see if any amount earned or spent was simply not entered. And lastly check if any amount was a only part of a larger amount on the Budget side such as a weekly or extra cash withrdrawal. For example, all category 110 "cash" withdrawals for the month added together need to total the Budget side item 110 amount for the entire month.
Budget side errors are relatively even easier to find and correct because they depend on fixed locations in the Regular or Other Income, Regular or Other Expenses blocks. When they do occur, as in Cashflow, it can be simply not entering an item in any of the blocks, or in the wrong block. Or it can happen if a Budgeted amount isn't available on the date it was budgeted to be, or in an amount it wasn't budgeted to be. A delayed paycheck deposit at the bank due to holidays or wekeends, for example, or a change in deductions you weren't planning on, or if you're fortunate, perhaps a promotion that kicked in or a bonus you received unexpectedly. None of these are usual, and all need to be adjusted for on both Cashflow and Budget sides when they do occur.
As for the third type of error, the error in cashflow which is repeated on the budget side, it is perhaps the hardest to notice of the three types. It often requires crosschecking against your bank statements and online account pages to see if something happened that somehow you didn't notice or enter properly in your spreadsheet, Our Pagemonth Budgets are not linked electronically to any bank information as are many other home budgets such as Mint. That has both pro's and cons. We feel our pro's by far outweigh the cons, because bank data is never completely current as income and expenses flow in and out at different times, and budgets such as Mint cannot project current balances beyond the data the bank has at any given time, as Pagemonth can and does.
So if your error month's data is repeated on both cashflow and budget sides, both end balances will display no error at all anywhere that month until you reconcile your bank statement or current month's transactions on their website.
In summary, your Pagemonth Budget is not a substitute for balancing your checking account but an aide in doing so. If things aren't coming out right, check the bank site information against your Pagemonth information and your checkbook. A fee may have been charged that you didn't enter, or perhaps even authorize, and it is possible for bank data itself to be erroneous on rare occasions. A phonecall during bank hours can often clear things up.
Yet errors do occur, and it is possible to carry them forward from any given month where they occur to subsequent months, even for all remaining months of the year, which may display twin end balances in perfect agreement even though the original month in error displays disagreement between its end balances!
How is this possible? It depends upon three things: where the errors are, the amounts entered, and whether they were repeated on both cashflow and budget sides. Let's take these one at a time:
First, errors made on only the Cashflow side are the easiest to locate and correct, because nothing in cashflow is carried forward to tthe next month or beyond, including its End Balance, which will likely.not agree with the Budget side End Balance. That is because the Budget side End Balance is the amount each month that is duplicated automatically as the next month's Beginning Balance, which is in turn added to or subtracted from with each Cashflow row entry. The error in the previous month's cashflow is therefore not carried forward from month to month in column D balances, and may not even be noticed in future months.
To locate a Cashflow error, however, is very easy. because it produces a column D balance that is also wrong, To find and correct it simply look for the differnce between the twin End Balances. which will be the amount of the error, then check what the amount should have been by glancing at its correct amount on the Budget side--again displaying the difference discrepancy amount. Once the error is corrected the End Balances should agree again and you can gi forward.
As for Cashflow errors in amount entered, if the amount is correct, look at its column D formula to make sure it was added or subtracted by the correct operand sign internally. either + or -. The wrong sign will of course produce the wrong balance. Also check to see if any amount earned or spent was simply not entered. And lastly check if any amount was a only part of a larger amount on the Budget side such as a weekly or extra cash withrdrawal. For example, all category 110 "cash" withdrawals for the month added together need to total the Budget side item 110 amount for the entire month.
Budget side errors are relatively even easier to find and correct because they depend on fixed locations in the Regular or Other Income, Regular or Other Expenses blocks. When they do occur, as in Cashflow, it can be simply not entering an item in any of the blocks, or in the wrong block. Or it can happen if a Budgeted amount isn't available on the date it was budgeted to be, or in an amount it wasn't budgeted to be. A delayed paycheck deposit at the bank due to holidays or wekeends, for example, or a change in deductions you weren't planning on, or if you're fortunate, perhaps a promotion that kicked in or a bonus you received unexpectedly. None of these are usual, and all need to be adjusted for on both Cashflow and Budget sides when they do occur.
As for the third type of error, the error in cashflow which is repeated on the budget side, it is perhaps the hardest to notice of the three types. It often requires crosschecking against your bank statements and online account pages to see if something happened that somehow you didn't notice or enter properly in your spreadsheet, Our Pagemonth Budgets are not linked electronically to any bank information as are many other home budgets such as Mint. That has both pro's and cons. We feel our pro's by far outweigh the cons, because bank data is never completely current as income and expenses flow in and out at different times, and budgets such as Mint cannot project current balances beyond the data the bank has at any given time, as Pagemonth can and does.
So if your error month's data is repeated on both cashflow and budget sides, both end balances will display no error at all anywhere that month until you reconcile your bank statement or current month's transactions on their website.
In summary, your Pagemonth Budget is not a substitute for balancing your checking account but an aide in doing so. If things aren't coming out right, check the bank site information against your Pagemonth information and your checkbook. A fee may have been charged that you didn't enter, or perhaps even authorize, and it is possible for bank data itself to be erroneous on rare occasions. A phonecall during bank hours can often clear things up.
Thursday, April 18, 2013
When Is the Best Time to Start A Budget?
When is the Best Time to Start a Budget? Sometimes users think they need to wait for 2015, since it's nearly May of 2014 already, and the yearly budget needs to begin with January 1, right?
Nothing could be further from the truth. People who want to begin budgeting effectively can do so anytime. How could you do it with our Pagemonth Home Budget, available free in Excel or Works at the bottom of our Pagemonth.com homepage?
Start today if you want, and go forward from now! You will need to enter your income and expenses that you anticipate you will have, as part of the Setup of your budget on your folder's template file. Follow the insstruction guidelines on our Setup and Help pages, and after you frame your workspace, enter your Income, Regular Expenses, and any Other Expenses you know you will have through the remaining months, budgeting rough estimates for vacations, gifts, education costs and other seasonal expenses you're fairly sure you need to plan for.
If you wish you can also plug in credit use in the Credit Charges rows for months you know you will rely heavily on Credit such as holiday gift buying, and don't worry about being specific. Just allot an amount overall based on past experience, then plug the amount in to item 111, your main credit card Regular Expense, for payment the following month. Try to pay it all if you can so you don't accrue any interest. If you absolutely cannot budget to pay it all off at once, break it in half or thirds over the next two months after that, but pay it all as soon as you can. When you see what you are being charged in interest for any balance you carry more than 30 days, it will remind you of the need for total payoff. Don't worry that a payoff will hurt your credit rating, because it won't.
So begin in the present, first by setting up your remaining months budget projections. For the month you begin, your balance will of course need to be entered for the beginning of that month since there will be no accurate balance automatically carried over from the end of the previous month.
Enter that beginning balance manually in J192 if you're starting in April, and take it from your checking account balance after the last entry for March. If it is off, use your bank website's online access or balance statements to help you refine that number. And remember you can readjust it any time.
Once you begin replacing your projected budget numbers with each day's actual numbers, entering each item of income and expense when it occurs, you won''t need to manually enter any other month's beginning balance anymore. It will be automatically carried over from the previous month's end balance.
Your budget should be accurate if you follow our guidelines, but of course it will not include this year's January, February, or March numbers, so your budget will only show April-December totals and averages, unless you want to go back through your check registers and find your balance on January 1, enter it manually in cell J3, then gradually rebuild your January, February, and March budget based on actual expenses, charges, and income. (The previous months' charges you can get from your credit card statements.)
If you do that, you should be able to replace the beginning balance for April you manually entered iin J192 with "=D187" (March's End Balance).and be caught up as though you had begun your 2014 budget on January 1.
That would have the added advantages of several months' actual numbers you could review or print out anytime, an accurate updating of your central projection totals for all months and categories in columns E and F. a quick sense of where you're headed in the end balances of all months of 2014, also to the nearest dollar, at the bottom of columns E and F, and increasingly accurate totals and averages through the rest of this year. You will find that data very helpful for reviewing, for setting up next year's 2015 budget, and for tax preparation next April.
Each year's budget begins with unknowns, projects estimates as information becomes available, and ends with known, solid figures. It's a matter of replacing the unknown with the known, basically, all year. If you set it up and maintain it properly, it will really help you manage your personal finances, and validate the idea that the best time to start a budget is as soon as you're ready, willing, and able. At Pagemonth we'll always be glad to help when you have questions or need assistance.
Nothing could be further from the truth. People who want to begin budgeting effectively can do so anytime. How could you do it with our Pagemonth Home Budget, available free in Excel or Works at the bottom of our Pagemonth.com homepage?
Start today if you want, and go forward from now! You will need to enter your income and expenses that you anticipate you will have, as part of the Setup of your budget on your folder's template file. Follow the insstruction guidelines on our Setup and Help pages, and after you frame your workspace, enter your Income, Regular Expenses, and any Other Expenses you know you will have through the remaining months, budgeting rough estimates for vacations, gifts, education costs and other seasonal expenses you're fairly sure you need to plan for.
If you wish you can also plug in credit use in the Credit Charges rows for months you know you will rely heavily on Credit such as holiday gift buying, and don't worry about being specific. Just allot an amount overall based on past experience, then plug the amount in to item 111, your main credit card Regular Expense, for payment the following month. Try to pay it all if you can so you don't accrue any interest. If you absolutely cannot budget to pay it all off at once, break it in half or thirds over the next two months after that, but pay it all as soon as you can. When you see what you are being charged in interest for any balance you carry more than 30 days, it will remind you of the need for total payoff. Don't worry that a payoff will hurt your credit rating, because it won't.
So begin in the present, first by setting up your remaining months budget projections. For the month you begin, your balance will of course need to be entered for the beginning of that month since there will be no accurate balance automatically carried over from the end of the previous month.
Enter that beginning balance manually in J192 if you're starting in April, and take it from your checking account balance after the last entry for March. If it is off, use your bank website's online access or balance statements to help you refine that number. And remember you can readjust it any time.
Once you begin replacing your projected budget numbers with each day's actual numbers, entering each item of income and expense when it occurs, you won''t need to manually enter any other month's beginning balance anymore. It will be automatically carried over from the previous month's end balance.
Your budget should be accurate if you follow our guidelines, but of course it will not include this year's January, February, or March numbers, so your budget will only show April-December totals and averages, unless you want to go back through your check registers and find your balance on January 1, enter it manually in cell J3, then gradually rebuild your January, February, and March budget based on actual expenses, charges, and income. (The previous months' charges you can get from your credit card statements.)
If you do that, you should be able to replace the beginning balance for April you manually entered iin J192 with "=D187" (March's End Balance).and be caught up as though you had begun your 2014 budget on January 1.
That would have the added advantages of several months' actual numbers you could review or print out anytime, an accurate updating of your central projection totals for all months and categories in columns E and F. a quick sense of where you're headed in the end balances of all months of 2014, also to the nearest dollar, at the bottom of columns E and F, and increasingly accurate totals and averages through the rest of this year. You will find that data very helpful for reviewing, for setting up next year's 2015 budget, and for tax preparation next April.
Each year's budget begins with unknowns, projects estimates as information becomes available, and ends with known, solid figures. It's a matter of replacing the unknown with the known, basically, all year. If you set it up and maintain it properly, it will really help you manage your personal finances, and validate the idea that the best time to start a budget is as soon as you're ready, willing, and able. At Pagemonth we'll always be glad to help when you have questions or need assistance.
Wednesday, April 17, 2013
Cash for the Merchandise
Budgeting for cash transactions is easily done, but you'll want to set up a time each week or so when you will hit the ATM for that week's pocket or purse cash. This post will suggest a way to handle cash as a regular expense and budget for it in your Pagemonth spreadsheet.
If you haven't gotten a Pagemonth Budget Folder for Excel or for Works, you can get one for $9.95 at the bottom of of our homepage. Open your budget file and notice it has a category for cash in Regular Expenses: category 110. January's monthly cash amount shows in cell O16 as $400.
This amount is based on an average of $100 per week. In my budget, I get my weekly cash on Fridays. So on the sample budget of $400 you'll use in most months, I'm budgeting for most months of any given year.
But you also need to budget for months with five Fridays and will need more cash for those. In 2013 there are four: March, May, August and November. Budget $500 for cash in column O for those months. I use the 2013 calendar printed on the back of my check register to spot those months quickly.
As for when you'll get your cash, it's up to you. But I assume you won't withdraw a whole month's worth at once to carry around or hide somewhere at home. So for the date in column L, type "var" indicating various dates. That will set up the cash on the Budget side of your spreadsheet.
Then you need to plan to withdraw your weekly cash on the Cashflow, left side of your budget. Enter "cash" in column B and $100 in column C for any dates you plan to get your cash.
Feel free to alter the dates anytime in column A We have distributed them on our budget sheets throughout each month with more days repeated around the middle and end of the month when most bills may be paid, and fewer at the beginning. But there's nothing functional about the dates in column A. You can redistribute them as you wish. As you change them around, however, try to keep them in chronological sequence as in a checkbook.
Our Pagemonth spreadsheets all show cash withdrawals on the 1t, 8th, 14th, and 21st of each money when you download them. They would show another withdrawal on the 28th in five-Friday months. Sometimes other entries will bunch things up too tightly and you'll need to shift things a bit, but try to keep the chronology intact, because otherwie your balance in column D will jump around all over the place. The dates will also provide a quick visual reference for finding items on the Budget side as you add in income and expene items.
Be aware that each amount in Cashflow is either added to or subtracted from your checking account balance in column D for its row, so when you move dates and items around be sure you give them the right formula in column D, using a + for additions and a - for subtractions.
So far, so good. But what should you do if you run out of cash by Tuesday and aren't budgeted for more till Friday? Get more cash when you need to, as much as you think you'll need. But be sure to enter it in Cashflow on that day, crowding in a row if need be, and add it to your Cstegory 110 total as well.
If you find you run out of cash regularly, increase your 110 totals to $125 or $150 per week for a few months and see if that works better. Conversely, if you find too much cash building up in pocket or purse, decrease your 110 total to $75 or even $50 for a few months. Eventually you'll find the amount that works best for your needs.
Budgeting for cash isn't difficult. It's something to estimate like any other Regular Expense then adjust it to actual experience.
If you haven't gotten a Pagemonth Budget Folder for Excel or for Works, you can get one for $9.95 at the bottom of of our homepage. Open your budget file and notice it has a category for cash in Regular Expenses: category 110. January's monthly cash amount shows in cell O16 as $400.
This amount is based on an average of $100 per week. In my budget, I get my weekly cash on Fridays. So on the sample budget of $400 you'll use in most months, I'm budgeting for most months of any given year.
But you also need to budget for months with five Fridays and will need more cash for those. In 2013 there are four: March, May, August and November. Budget $500 for cash in column O for those months. I use the 2013 calendar printed on the back of my check register to spot those months quickly.
As for when you'll get your cash, it's up to you. But I assume you won't withdraw a whole month's worth at once to carry around or hide somewhere at home. So for the date in column L, type "var" indicating various dates. That will set up the cash on the Budget side of your spreadsheet.
Then you need to plan to withdraw your weekly cash on the Cashflow, left side of your budget. Enter "cash" in column B and $100 in column C for any dates you plan to get your cash.
Feel free to alter the dates anytime in column A We have distributed them on our budget sheets throughout each month with more days repeated around the middle and end of the month when most bills may be paid, and fewer at the beginning. But there's nothing functional about the dates in column A. You can redistribute them as you wish. As you change them around, however, try to keep them in chronological sequence as in a checkbook.
Our Pagemonth spreadsheets all show cash withdrawals on the 1t, 8th, 14th, and 21st of each money when you download them. They would show another withdrawal on the 28th in five-Friday months. Sometimes other entries will bunch things up too tightly and you'll need to shift things a bit, but try to keep the chronology intact, because otherwie your balance in column D will jump around all over the place. The dates will also provide a quick visual reference for finding items on the Budget side as you add in income and expene items.
Be aware that each amount in Cashflow is either added to or subtracted from your checking account balance in column D for its row, so when you move dates and items around be sure you give them the right formula in column D, using a + for additions and a - for subtractions.
So far, so good. But what should you do if you run out of cash by Tuesday and aren't budgeted for more till Friday? Get more cash when you need to, as much as you think you'll need. But be sure to enter it in Cashflow on that day, crowding in a row if need be, and add it to your Cstegory 110 total as well.
If you find you run out of cash regularly, increase your 110 totals to $125 or $150 per week for a few months and see if that works better. Conversely, if you find too much cash building up in pocket or purse, decrease your 110 total to $75 or even $50 for a few months. Eventually you'll find the amount that works best for your needs.
Budgeting for cash isn't difficult. It's something to estimate like any other Regular Expense then adjust it to actual experience.
What, When, and How Much: Budget, Cashflow, and End Balance
Over the years some have suggested we change our basic spreadsheet design to automatically transfer data from the Cashflow, left side to corresponding locations on the Budget, right side, or vice versa.
That way we would need to enter data only once, not twice as is currently required.
Those well-meaning suggestions are appreciated, and it would work. But it would also defeat the whole purpose of having the two sides: to provide a cross-check of each other and produce an End Balance at the bottom of each that exactly matches the other to the penny, though each arrives at that end balance by different means.
The Budget side is the "What" side of our budget sheet because it itemizes and totals income, expenses, and charges by category, and its information appears in the same locations throughout the year. It also categorizes "What Kind of" Income or Expense by grouping items into blocks of Regulat Income and Other Income, Regular Expenses, Other Expenses, and Charged Expenses.
Because data on the Budget side remains in the same positions, specific items are quick for the eye to locate in any given month.
The Cashflow side is the "When" side of our budget sheet because it itemizes and totals income and expenses by chronology, and its information appears in shifting locations throughout the year depending on how many income or expense items cluster around different dates. It distributes its 29 to 31 days per month vertically among 56 available rows, and its items add or subtract from the running balance in column D to produce its End Balance in cell D61 for January, which must agree with the Budget Side End Balance in cell J61 for January exactly before moving on.
So it should be apparent that automatically transferring items from the two sides one to the other in order to save double entry time would defeat the purpose of having the two sides completely. Their End Balances would agree each month, but they would be wrong! Whatever mistakes were made on either side would automatically be transferred to the other side as well.
What we designed in our Pagemonth Budgets, then, is what some call double-entry bookkeeping, in which independent sides exist to confirm each other. We believe it to be a better form of home budgeting than others.
That way we would need to enter data only once, not twice as is currently required.
Those well-meaning suggestions are appreciated, and it would work. But it would also defeat the whole purpose of having the two sides: to provide a cross-check of each other and produce an End Balance at the bottom of each that exactly matches the other to the penny, though each arrives at that end balance by different means.
The Budget side is the "What" side of our budget sheet because it itemizes and totals income, expenses, and charges by category, and its information appears in the same locations throughout the year. It also categorizes "What Kind of" Income or Expense by grouping items into blocks of Regulat Income and Other Income, Regular Expenses, Other Expenses, and Charged Expenses.
Because data on the Budget side remains in the same positions, specific items are quick for the eye to locate in any given month.
The Cashflow side is the "When" side of our budget sheet because it itemizes and totals income and expenses by chronology, and its information appears in shifting locations throughout the year depending on how many income or expense items cluster around different dates. It distributes its 29 to 31 days per month vertically among 56 available rows, and its items add or subtract from the running balance in column D to produce its End Balance in cell D61 for January, which must agree with the Budget Side End Balance in cell J61 for January exactly before moving on.
So it should be apparent that automatically transferring items from the two sides one to the other in order to save double entry time would defeat the purpose of having the two sides completely. Their End Balances would agree each month, but they would be wrong! Whatever mistakes were made on either side would automatically be transferred to the other side as well.
What we designed in our Pagemonth Budgets, then, is what some call double-entry bookkeeping, in which independent sides exist to confirm each other. We believe it to be a better form of home budgeting than others.
Tuesday, April 16, 2013
Buffering: Budgeting for the Unexpected
If everything could be foreseen, we could budget for it and handle things pretty smoothly But such is not the case. So much can happen that render our budget projections inaccurate: higher than expected utility bills, a car repair, a medical emergency, a job change--you name it.
But there are ways to budget for the unexpected. I recoommend buffering your Pagemonth budget spreadsheet, as I do mine. Basically the concept is simple: I build in about $1000 a month more than I think I'll need to spend.. And if something comes up, that buffer will often handle it.
I use category 111 in Regular Expenses, my credit card payment, to absorb my unforeseen costs, before they're even known. If I plan to charge nothing whatsoever, item 111 still gets $1000. If I''m pretty sure I'll have to charge $3000 in a given month, 111 gets $4000 that month. You get the idea. I build in a $1000 buffer each month, and raise (or lower) it as things become known.
As an example, my wife's car was having problems our regular gas station mechanic couldn't fix, and I had to take it to the dealer, knowing it could cost a lot more. And it did. To fix the problems right I had to lay out $2700. Fortunately I had good credit that could absorb that within my credit limit, so I paid by credit card.
But as soon as the estimates were made, I set up my next month's budget category 111 payment for $3000, and it could go to closer to $4000 or more by the end of this month. I buffered in the repair and gave myself 30 days before any interest would begin to accrue. In other words, I budgeted to pay off the entire bill at once, and I will, and will still have my $1000 buffer in place to hedge against other charges we might make in the next two weeks, since it's only the middle of March.
It doesn't matter what category you choose to provide your buffer. It could be cash, category 110. But I prefer the charge card since I keep my balance paid off each month no matter how inconvenient it is at the time, so I never have to pay interest on it by paying in installments.
The idea of buffering is to see how much you can stretch your theoretical expenses and still grow your balance from month to month. I used a big repair bill in the above example, but you can buffer in other ways as well. Unless you know what your utility bills will be, budget a bit more for them than you believe they will be. Unless you're certain your net income after taxes will be a certain amount, budget a bit less than you expect to be paid.
In other words, underestimate income and overestimate expenses a bit throughout your budget projections. Then, as actual income and expenses replace budgeted income and expenses, you should find your bottom line balances increasing through the year, because you built in buffers.
Some months may project lower balances than you find acceptable, and you can improve your situation by revising and cutting back on some things or supplementing on the income side, even if it means you'll need a higher paying job or second, part-time income for a time.
Use your budget to plan your goals and carry you through obstacles that could prevent your reaching them. Don't be fooled by your initial setup end-of-year estimated balance, which can be deceptively high before experience brings it down to reality. Try for goals that are realistic, and be prepared to pay out those expenses by buffering for them.
But there are ways to budget for the unexpected. I recoommend buffering your Pagemonth budget spreadsheet, as I do mine. Basically the concept is simple: I build in about $1000 a month more than I think I'll need to spend.. And if something comes up, that buffer will often handle it.
I use category 111 in Regular Expenses, my credit card payment, to absorb my unforeseen costs, before they're even known. If I plan to charge nothing whatsoever, item 111 still gets $1000. If I''m pretty sure I'll have to charge $3000 in a given month, 111 gets $4000 that month. You get the idea. I build in a $1000 buffer each month, and raise (or lower) it as things become known.
As an example, my wife's car was having problems our regular gas station mechanic couldn't fix, and I had to take it to the dealer, knowing it could cost a lot more. And it did. To fix the problems right I had to lay out $2700. Fortunately I had good credit that could absorb that within my credit limit, so I paid by credit card.
But as soon as the estimates were made, I set up my next month's budget category 111 payment for $3000, and it could go to closer to $4000 or more by the end of this month. I buffered in the repair and gave myself 30 days before any interest would begin to accrue. In other words, I budgeted to pay off the entire bill at once, and I will, and will still have my $1000 buffer in place to hedge against other charges we might make in the next two weeks, since it's only the middle of March.
It doesn't matter what category you choose to provide your buffer. It could be cash, category 110. But I prefer the charge card since I keep my balance paid off each month no matter how inconvenient it is at the time, so I never have to pay interest on it by paying in installments.
The idea of buffering is to see how much you can stretch your theoretical expenses and still grow your balance from month to month. I used a big repair bill in the above example, but you can buffer in other ways as well. Unless you know what your utility bills will be, budget a bit more for them than you believe they will be. Unless you're certain your net income after taxes will be a certain amount, budget a bit less than you expect to be paid.
In other words, underestimate income and overestimate expenses a bit throughout your budget projections. Then, as actual income and expenses replace budgeted income and expenses, you should find your bottom line balances increasing through the year, because you built in buffers.
Some months may project lower balances than you find acceptable, and you can improve your situation by revising and cutting back on some things or supplementing on the income side, even if it means you'll need a higher paying job or second, part-time income for a time.
Use your budget to plan your goals and carry you through obstacles that could prevent your reaching them. Don't be fooled by your initial setup end-of-year estimated balance, which can be deceptively high before experience brings it down to reality. Try for goals that are realistic, and be prepared to pay out those expenses by buffering for them.
The Summary Page: "Lucky Thirteen"
Every Pagemonth Budget has twelve month pages plus a Summary Page, which I like to call "Lucky Thirteen." You will find it to the right of January in your budget spreadsheet, occupying columns R through AF, and about 6o rows deep.
It's not part of the default print area of the twelve monthpages, but you can edit it and print it when you need to or want to. Before you decide to alter it, however, note that it is almost entirely formulas, plus some identifying labels and categories on its left and totals and averages on its right and bottom.
The Summary Page is something you'll refer to occasionally when you want to track patterns of income and expense, or get annual averages for setting up a new budget year, or grabbing totals for tax preparation, but normally you won't view it much, for a couple of reasons:
You won't often need to use your Summary Page because each monthpage gives you the same information for that month, and totals all income and expense categories individually for the year in the constantly updating center columns E and F to the nearest dollar. The Summary Page simply presents those monthly totals in twelve monthly columns plus the year's totals and averages.
The Summary Page is also off to the side because it is formatted to display and print differently than the monthpages. That means that to print it you will need to briefly reset the print area to the Summary Page area only, print it, then return to the default monthpages print area.
And it is off to the side as well because beside and below it are formula blocks for each monthpage you will only alter at your peril, and probably never have a need to print.
So, "Lucky 13" is what it is and where it is for several reasons. But why do I call it "Lucky 13?"
Those who have used our Pagemonth Budget for a couple of years regularly may already know, because from the moment you begin to set up your spreadsheet through the last entry of December 31, you can watch your end balance grow and grow, and even recover from lean times or heavy expense times like vacations, holidays, birthdays, unexpected needs and emergencies, and grow again. It is the reward of planning ahead, adjusting to changes, and maintaining your budget. If you do you will gain peace of mind. And that's lucky.
It's not part of the default print area of the twelve monthpages, but you can edit it and print it when you need to or want to. Before you decide to alter it, however, note that it is almost entirely formulas, plus some identifying labels and categories on its left and totals and averages on its right and bottom.
The Summary Page is something you'll refer to occasionally when you want to track patterns of income and expense, or get annual averages for setting up a new budget year, or grabbing totals for tax preparation, but normally you won't view it much, for a couple of reasons:
You won't often need to use your Summary Page because each monthpage gives you the same information for that month, and totals all income and expense categories individually for the year in the constantly updating center columns E and F to the nearest dollar. The Summary Page simply presents those monthly totals in twelve monthly columns plus the year's totals and averages.
The Summary Page is also off to the side because it is formatted to display and print differently than the monthpages. That means that to print it you will need to briefly reset the print area to the Summary Page area only, print it, then return to the default monthpages print area.
And it is off to the side as well because beside and below it are formula blocks for each monthpage you will only alter at your peril, and probably never have a need to print.
So, "Lucky 13" is what it is and where it is for several reasons. But why do I call it "Lucky 13?"
Those who have used our Pagemonth Budget for a couple of years regularly may already know, because from the moment you begin to set up your spreadsheet through the last entry of December 31, you can watch your end balance grow and grow, and even recover from lean times or heavy expense times like vacations, holidays, birthdays, unexpected needs and emergencies, and grow again. It is the reward of planning ahead, adjusting to changes, and maintaining your budget. If you do you will gain peace of mind. And that's lucky.
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