Friday, November 17, 2006

Spreadsheets for Budgeting

I use spreadsheets to budget. I find spreadsheets to be easier and less time consuming than budgeting software.

I’ve tried both Microsoft Money and Quicken standard editions, and I didn’t like either one. For me, they were redundant and tedious to use.

I have to post daily in my check register to record debit card purchases, credit card payments, and checks. I don’t want to have to record all of these transaction all over again in Money or Quicken.

With a spreadsheet all I have to do is add up the categories of expenses and record them into into the spreadsheet.

Now, both software programs do have a feature that downloads your bank and credit card statements, but I always seem to have problems with these downloads. Either the bank or the software programs want a fee to download the statements, or the day I request a download, my statement hasn’t been cut yet and isn’t available.

Another issue I have with the budgeting software is that I want to record the transactions when they occur (how else are you going to remember to record them) not at the end of the month when my statements are available.

For example, when I use a credit card to pay my phone bill I need to deduct the payment from my check register and post the payment in my budget on that day, not at the end of the statement cycle (I use this card to pay my phone bill because I get 5% cash back on utility bills).

So, I would record the payment into my budget software so I wouldn’t forget it. Then when I downloaded my statement into the software, I would end up with double entries. Budgeting software is just not user friendly for me.

So, I use spreadsheets.

I have Microsoft Excel and I know how to code (or program) it to do mathematical formulas, but I don’t want to take the time to do it (are we seeing a pattern of laziness here?). This problem was solved for me when I found

I was searching for a good budgeting, saving, debt reduction web site when I came across This web site is a gem! Not only does Michael (owner, writer, editor, and all-round webmaster at offer tons of excellent articles on all things financial; he also gives away FREE spreadsheets.

Michael’s spreadsheets are easy to use and you can modify them to suit your needs. Now, don’t go messing with the formula cells in the spreadsheets if you don’t know what you are doing, or you will end up with incorrect calculations. But, you can change the category names, tab names, dates, and of course the names of your bills. offers several budgeting spreadsheets but I like the BMF (Balanced Money Formula) Spending Plan Spreadsheet the best. I prefer it because with the BMF Spreadsheet I can keep track of all of my finances in the same place.

The BMF Spreadsheet has separate tabs to record Income, Needs, Wants, and Savings. But, after using it for a few months, I modified it. I changed Needs to Expenses and Wants to Freedom Accounts. I left Savings as it was.

It suits me better this way because I have all my financial matters in one file, I have separate tabs for each section of my budget (Expenses, Freedom Accounts, and Savings), and I don't have to scroll to see anything (all working areas are above the page fold).

With these minor
changes (I just changed the names and labels of some things, I didn’t change any of the mathematical formulas), I had a Customized Spreadsheet that tracks all of my spending, savings, and debts, and I didn’t have to code a bit of it (Thanks again, Michael.)

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