Welcome to tracking of income and expenses for the month. Please note that I get paid on the last day of the month so my cash flow net effect will usually be negative until the last day of the month.
This does not mean that I am adding to my debt, it just means that the money coming in is less than the money going out because bills are due starting on the first but I don’t get paid until the last day.
Income for the month to date: $1.59
Expenses for the month to date: $1304.57
Net effect: -$1302.98
Wow it is only the first week in and already the net cash flow looks UGLY. This is because I am paying the bills and have not had much income yet. I will not be getting paid until January 30th so unless I get some money from the blog or something the net flow will continue to be negative.
Since the last posting I have spent an additional $8.34 on food. I needed to get some fresh fruit and since I like my bananas greenish I got some this weekend.
I spent $38.75 on general household stuff….including a new purse for work. My old one was really old and outdated and I splurged $15 on a new bag!!!!
I also sent off $310 to my brother to pay the loan at home and incurred $9.46 in Money Gram fees.
I am feeling more relieved about my streamlined budget which accounts for
Non Food items.
Non Food includes clothing, medicines, bath gels and other random stuff that I purchase that cannot be eaten or classified as a bill. This falls under the Simplify section of my Simple Goals For 2009 and it feels really liberating. I used to stress over each penny and over classify things like a crazy woman.
I had a section in money for fruits, general groceries (milk, bread), candy, vitamins etc. It was really too much to manage and it took a while to separate everything into the various categories in Microsoft Money. Now I just enter two categories and I am done. Whew!
I will see you guys and gals later as I continue my journey to save money and become debt free!!!!
You know, I studied accounting for awhile. I think, when you’re tracking your finances, you may want to take a few cues from those practices.
In accounting, you state both your assets and your liabilities. This would help provide a more realistic picture of your money situation.
For example, it’s Jan 6, which means you got paid 7 days ago. That’s (I’m assuming) what you’re using to pay all the bills due at the beginning of the month.
So rather than state income for the current month, perhaps you should state the most recent income, given that that’s how you use it.
Cash in 1/31/09 $3,000
Feb mortgage $1,000
Feb car payment $200
Then you have a total of money for the month. Which you can then break up as you see fit. If you want to track groceries by week, for example, you can do that based on the money you actually have in your account. Or you can keep a running total for the month: $20 of $150.
It just seems like a more intuitive way to deal with your money. Because you’re not relying on the income at the end of the month (I hope) to pay this month’s bills. You’re using the income from the previous month.
Anyway, just my lil two cents. Way to go on your debt-repayment process!
Abigail’s last blog post..I warrant you’ll be wantin’ a warranty
Abigail I took accounting as well and I am aware of the principles you are mentioning. However, I am not tracking my cash balance as your example shows, but my net cash flow for the month. Money that I got on the 30th of one month is not flow for the next month.
The income that I track for the month is not predicted income but actual income that has already been deposited. I only count the income from my Lending Club Loan when I transfer it from LC to my Electric Orange account. At that point it cannot be taken back since it is a payment that has already been processed. On the day that it reaches my ING account I count it as part of my flow for the month.
Since I am tracking how cash flows in and out of my accounts for the month I post every day as the cash flows regardless of what else happens.
It does not matter what is in the account…it is the flow I am tracking. Of course I am using the money from last month to pay for this month’s expenses because this money has already been budgeted for.
I mentioned in an earlier post that my net worth is actually higher than what is listed in the sidebar because I did not include the book value of my car. I also listed the reasons why I did not want to list the value of the car….as this makes my accounting easier not having to deal with depreciation.