The day I moved out of my parent’s home to finally fend for myself, my dad and I left in the early hours of the morning to drive a rented transporter with all my childhood room belongings over 300km south. Until deep into the night he helped me build furniture and decorate my room. When he left the next morning, my wardrobe was up and filled, my tv was connected, the kitchen stocked, I knew how to use the washing machine and on my desk was an entire computer system set up including a printer and internet connection. I was well and truly ready to live on my own. Or so I thought.
What I hadn’t factored in, was the sudden responsibility to pay my own bills (having no prior experience in handling money apart from my piggy bank effectively). Only a few months later I found myself in the red on my account for the first time because I had forgotten about an impeding regular payment and spent the money elsewhere. I rang my parents, as you do as a student, to help me out. My dad, always the kind and resourceful man he was, transferred some money immediately, but he also sent me an excel spreadsheet via email to help with my household accounts.
I’ve used this spreadsheet ever since and I’ve never ended up in the red again. This might sound a little dramatic as an excel spreadsheet is certainly not a miracle cure to excessive spending, but it turned out to be a great tool that helped me to gain better understanding of the money I had, in which proportions it went were and how much I had to spend freely (not much in the beginning obviously).
When my favourite Englishman and I moved in with each other, I started a new set of spreadsheets for the two of us. Particularly as a family of three I’ve come to cherish the insight I’ve gained on our household spending on a weekly basis.
My dad recently passed away and I miss him daily. Every Friday, when I sit down to do our accountings, I’m reminded of his generous yet cautious spirit. There is a picture on my desk of him and our littlest lady, it was taken in the hospital only a few days before his fateful operation and their wide grins and sparkling eyes are full of life. She might no longer grow up with him by her side but I’m confident that his kindness and caution, the lessons he taught me and the practical wisdom he shared will guide her just as much as they did me.
Now, I’m almost certain there are more efficient ways of keeping a household book, maybe even apps nowadays, but for us this method is simple enough. Don’t fix what isn’t broken, they say. However, if you feel you could do with a little fix to your spending and budgeting, I invite you to download our Household Budget Planner and give it a try (find it her for Numbers or Excel).
Knowing what comes in and goes out has given us such valuable foresight and in the past has even afforded us support which our initial budget couldn’t, by allowing us to take on and pay off quickly some smaller loans without ever getting into trouble. For example a few years back we bought and payed off our boiler with a small loan. By adding the payment to our standing costs we never fell behind on payments and it was payed off within 18month – the time period for which the loan was interest free.
Keeping a Simple Household Budget Planner
The following paragraphs give a detailed description of the budget planner and how we use it. I’ve tried to keep it as brief and simple as the process of working with it now feels to me, however I appreciate that topics like this – with specific references sprinkled in the mix – can get confusing very quickly. If you’re interested in using it, I’d recommend downloading it now (for Numbers or Excel) to reference it while you read on.
Our household budget planner consists of three spreadsheets within one document. The first is a table of the year in a view showing all incoming and outgoing funds per category per month. The funds shown are either fixed sums because we know them or estimated spending if real costs aren’t clear yet. The second spreadsheet is a table with an overview of our savings and the third table is a simple track list of our monthly spending that aren’t noted in the main table.
The Year in View Budget
In the first table costs are separated by category (ranked by importance): Starting with Living costs which includes our mortgage (previously rent), water, electricity, gas, food and petrol, if we were to pay for childcare that would be listed here too; then insurances and taxes; tv and telephones; after that we have a section of subscriptions and regular payments we signed up for, e.g. I’ve got a magazine subscription, we pay a monthly fee towards our littlest lady’s gymnastics class at the moment and last but not least different budgets and savings funds.
At the bottom of the table the overall costs for the month are displayed and underneath how that compares to the income from the top (Total Balance (excl. spendings). The number in this cell also indicates how much we have available as ‘General spendings’ money which is recorded in the cell below and refers to anything we spend outside our budgets. General Spendings money shows zero until the months starts and the tracking on the ‘Monthly Spendings’ spreadsheet begins (the cell is programmed to feed its content from the equivalent month on the second spreadsheet). If the ‘Total Balance (excl. spendings)’ shows zero or a minus figure we need to discuss which of our self-imposed budgets, highlighted in blue on the Budget Table, we are going to cut for that month because experience shows we’ll always need some spending money no matter how frugal we live. However, if this would be a regular occurrence we would obviously have to reconsider how much we can hold back for savings each month.
As mentioned above self-imposed budgets are highlighted in blue. Any categories in the Year in View Budget that feed into a budget to save up for lump sum payments throughout the year are highlighted in turquoise. Effectively this is to distinguish between the money that actually leaves our pockets for good (all categories in white) and the money that we simply refer to a save-keeping place to use at a later time (blue and turquoise).
The spreadsheet for our monthly spendings runs from January until June and then underneath again from July until December. Each month is separated into three columns to record who was payed, for what and how much. The total sum is recorded on top in red and the cell feeds directly in to the equivalent cell on the Year in View Budget to keep money tracking up to date.
For us monthly spendings happen only on two cards (one for the Englishman and one for me) coming from one account! We’ve agreed early on that most personal items (clothes, books, hobbies) will be paid from our joint account within reason. Neither of us are big spenders so this has been fairly even over the years. However we do have personal accounts too for when we get money for birthdays or Christmas and anything in there is to be use at our own discretion. Mostly we use it to buy each other presents though, which has always been clearly in my favour as the Englishman is a much better saver (and due to his work bonuses also has bigger funds 😉
If we buy something that we have a savings fund for, for example £25 on baby clothes (Baby Fund) or £3 on toilet roll (Housekeeping Fund), we still use the money out of our main account and record it under monthly spendings. However, at the end of the week I will reimburse the joint account from our savings account and the incoming money is again marked down in the monthly spendings but with a minus (-£25 and -£3). Over the years I have found this to be the easiest way to keep accurate track on the main spreadsheet without losing inside on where we spend our money.
The Savings Account
The Savings Account spreadsheet then is a simple table with the month listed on the left followed by the budgets listed along the top row. The first cell underneath each budget shows the total for that budget, then the budget is separated into two columns ’In’ and ‘Out’. In the very top left corner of the document above the table is the Total of the Savings Account, this cell is calculated based on the total sums from all budgets. If the track record is correct this number should be the exact same number as on the bank statement for the savings account.
Savings funds are not a necessity but a great way of ensuring there is something in the pot to spend if we need or want something. They spread the costs of our hobbies or build a safety net for unpredictable costs. Currently we’ve got saving funds for our holidays, home maintenance works (you know, when the boiler breaks or the tap leaks and you’ve got a tight month, there is still something there to keep the house warm and water running), my contact lenses, the Englishman’s football and our daughter, as well as our allotment.
We also use this approach for any larger bills that come out at different times of the year. Our water bill only comes out in April and October but we pay money into our water fund every month and then pay the bill from the savings accumulated. Same goes for some insurances and the tv tax. It is not always possible to make an exact calculation of how much to save each month. For example we don’t know the amount for our car insurance before it runs out and we have to re-negotiate the contract. Car insurance is expensive in England and depends on many variables, so we base the monthly savings sum on the previous years payment divided by twelve. Some years we had to top up the fund in the end, others we made a little saving (and then kept it back for next year). Either way we weren’t unexpectedly hit with a £800 bill and no spare money.
The amount that goes into each budget per month has been agreed by us generally at the beginning of the year and is recorded under ‘In’ as soon as the money has been transferred. Although variations occur, as mentioned before, if the money is needed elsewhere or not enough is coming in. Any money outgoing is noted down under ‘Out’. If I make a reimbursement to the joint account from any of the budgets I will mark it down here as well as record it (with a minus) under Monthly Spendings (as mentioned above).
Simple ways to support the tracking
There is no one way to fill this document in, but here are a few pointers on how I use the spreadsheet:
On the first Friday of every month:
Note down actual income: As our income varies slightly based on the Englishman’s overtime and my fluctuating side-hustling activities, I use his baseline wage as a place holder to make predictions and indicate any months we might struggle. As soon as the money comes in the numbers are corrected.
Transfer all agreed sums to savings account: To avoid spending any money before saving it, I fill our budgets straight at the beginning of the month. If needed we can always take money out from the savings (even for other costs than previously agreed) but we can’t save anything we spend already.
Once a week:
Take note of money going out: Any of the amounts in the Year in View table that have gone out for the month are simply marked from black to green and any spendings are tracked in the Monthly Spendings table.
Check account balance vs. the actual account balance: The last cell in each monthly column is the current account balance. It is not an auto-calculating cell, just a placeholder to manually check the calculations against our actual money still in the bank. Each week I simply add up all cells with already received income (some income like child benefit gets payed only mid month!) and then subtract all cells of payments that have already gone out. The result should reflect the exact account balance shown on our account. If the numbers don’t match I obviously need to figure out why – most often I’ve forgotten to add a cell or haven’t tracked the spendings correctly on Monthly Spendings.
A joint account for joint costs: We’ve got a joint account from which we pay all our joint costs from mortgage to food to standing subscriptions we agreed on.
Mostly on card: When out we now pay almost only on card because for us it makes it easier to track the money.
Keep receipts when paying cash: When drawing out and paying with cash it is helpful to keep the receipts in order to understand where the money went in the end. However some months we hardly draw any cash out, so the few times we do I simply note it down as Cash in Monthly Spendings and don’t bother with further tracking. If we’re not crunched for the £10 or £20 that are unaccounted for, it’s not worth the hassle.
Now I said it at the beginning and I repeat it now, I’m certain there are simpler ways of tracking your spendings and keeping your bank balance in check. But this system has always worked for us and so I thought it might be worth sharing here for anyone who’d like a little help with their household book keeping. You can download our Household Budget Planner here for Numbers or Excel (please be aware that the categories and sums shown are just place holders to make the document easier to read and understand and do not represent our actual income and spendings – although I have made sure that the sums are reasonable estimations based on income and living cost for the UK in 2019). If you have any further questions leave me a comment underneath.