How to Make a Budget: Making an Expense Summary List

Have you experienced wondering where did your money go? Don't worry you are not alone?

Do you want to be able to track down your expenses yesterday, last week, last month, last year?

If your answer is yes, then read on. I'll make it quick, promise.


STEP 5: MAKING AN EXPENSE SUMMARY LIST

This is an example of an Expense Summary List.



Things to take note of this list.

(1) The Expense Summary List is good for one year.
Each column is equal to one payday or 15-days. In the example, the payday is on the 5th and 20th day of the month.

(2) The items in the list are the same as those we can find in the Fund Allocation List. The order is also made the same to make it easier to process (to be discussed in the next posts).

(3) The total expense (TE) is equal to the sum of all the items from item 1 to item 18. The sum can be easily computed using Microsoft Excel.

(4) The expected expense (EE) is equal to your maximum targeted expense per bimonthly or per in-between paydays. This figure is the same as the total in the Fund Allocation List. (See How to Make a Budget: Making a Fund Allocation List)

(5) The out-of-budget is simply the difference between the expected expense and the total expense. Take note that I used EE - TE in my computation so that if you exceed your budget, the figure will become negative (-). This way, with just one glance you will know that you're already beyond your budget which is not a good thing. (The negative 70 (or -70) in the list means that you are P70 (seventy pesos) out-of-budget.)

(6) It is highly recommended that the entry is made at the same time as you pay your envelope (E-bank).

(7) With this list you can easily see and review where your money went. You can also use this list to make necessary adjustments to you expenses so as not to spend more than your earnings.

Congratulations! You now know how to monitor your expenses. As promised, I made it quick but I made sure that I covered everything essential in this topic. Now it's your turn! Start making that list of yours asap, and start enjoying the feeling of knowing that you can trace your expenses anytime, and that you now have the means to warn yourself from overspending.

Now live a peaceful and "bad-debt-free" life.

PS: A budget is our main tool to staying out of debt but like every other tools, no matter how high-tech or effective it is, if the user will not use it properly then it won't deliver it's full potential. The secret to keeping a budget is discipline and consistency just like in most everything else.

PS: If you want to know more how to save money, how to avoid debt, how to get out of debt, and how to make a budget then click HERE. This is the home page of my blog where I shared my knowledge and experience in budgeting, expense tracking, financial planning, and making a budget that is not only doable but I actually proven for 8 years. I also shared tips, which I actually use regularly, on how to save money, where to save your money, and in the process you will know how to avoid debt. Learning to avoid debt is easier than getting out of debt so I put more emphasis on staying out of debt. As a bonus, I also assembled information on how you can make your own financial planning and budget software. To get all this information for free, please click HERE.

PS: I am interested to know if you find this article helpful so please feel free to drop some comments.