After graduating college, I knew right away that I would need to make and stick to a budget in order to spend wisely and start saving. My parents raised me with the mindset to be a saver not a spender, which is something I am grateful for, that has also served as an unconscious pressure for me to start saving as soon as possible. I recently started my full-time job, meaning I now have a paycheck every two weeks deposited in my bank account. I want to hold myself accountable by making sure my money doesn’t leave my bank account as soon as it comes in, so I knew I needed a budget.
Many of my 20-something friends rely on apps like You Need a Budget or Mint. And when I asked them their thoughts, most of them only had positive things to say. I downloaded Mint in college and never used it, but I did like the interface of it. However, after talking with my older brother, who is the ultimate saver, I decided to follow what he did: old school Excel.
I don’t think there is anything wrong with using an app, but the one thing my friends said about the apps is that they are automatic, requiring you to consciously open the app to look at your spending. I wanted to make myself look at my budget each time I had to put in an expense and also as a way to account for cash spending as well.
Having an app, from my perspective, is the passive way to approach your budgeting. Which is much better than having no way to budget, keep in mind. But I’ve found that using an Excel document has forced me to actively play a role in my budgeting. I have to make categories, set price allocations, and manually enter each time I buy something.
I created a simple table with columns labeled: store, category, memo (aka give the details of the purchase), price, date, and amount spent (or earned!). The final column is the net total for the month, which starts negative until I sing with joy when my paycheck is deposited.
I’ve also released my inner nerd and used the excel function to sum if, allowing the data from my table to be pulled into categories that detail the sums. For example, if I purchase groceries from Trader Joe’s, I’ll put the line item as ‘grocery’ for category. Excel sees that I’ve entered ‘grocery’ and will pull the data amount into a total on the side. So each time I buy groceries, on the side of the table Excel will give me the total for the month I’ve spent on groceries.
It’s a simple way of keeping track of anything, but with some color coding (red for expenses, green for income), I can take a quick look at it to get an accurate depiction of how I’m doing for the month. At the end of the month, whatever is leftover from the month goes right into savings!
Using Excel doesn’t allow me to take any short cuts when it comes to my spending, allows me to create custom categories, and is an affordable and accessible way to take control of your budgeting. You can easily do this with the old school pen and paper too, if you’re sick of looking at technology all of the time!