You could argue that handling personal finances electronically is a wonderful thing. Agreed. Paperless means no more deposit slips or envelopes at the ATM. No more holding up the other customers in line while you write a check (or cheque) and show the cashier your ID. Just pull out the plastic. No more worrying about whether the check you mailed arrived on time. You don’t have to call the bank and put up with annoying automated menus. You can see exactly when a payment cleared your account because you set the date online. There are software programs like Quicken to keep track of your spending. You enter transactions as you go and when tax time comes around, boom. Everything is instantly calculated for you.
All true, except for one critical part of taking control of your personal finances: budgeting. So far, nothing electronic beats the old-fashioned ledger. You can buy these pads or binder pages relatively cheap. Columns across the top and down the side are numbered to allow for easy organization. You could look for a budget-keeping book with a pre-printed list (insurance, groceries, etc.). Some items will and won’t apply to you, whereas the blank page of a ledger is yours to customize. Use a pencil, with an eraser, so you can easily make changes (versus having to reopen a computer document if you forget something).
Your goal in budgeting is to balance what you owe against what you earn. On a 13-column page, if you have two paydays per month, use the top half for payday one and the bottom half for payday two. Leave enough space between, so three to four months fit on each page. Underneath each payday, list what bills are usually due. For instance, you may allot utilities, part of the mortgage/rent, telephone, etc. to one or the other. You don’t want to overload one payday with so many expenses that you have no wiggle room. Be realistic. You can shift or split expenses between paydays or between months on the page. And don’t forget to include savings. Experts usually recommend that you “pay yourself first.” After you add up your basic living expenses, you can see what remains for discretionary spending, paying variable bills like credit cards, and saving.
Now, instead of stressing over a pile of bills, you have a clear picture of your dollars in and dollars out. Keep the ledger handy in a drawer. After you’ve done a year’s worth of pages and start a new year, you can flip back to instantly see where your finances were and check for expenses that come up seasonally.