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Create a Spreadsheet to Keep Your Finances Organized

Create a Spreadsheet to Keep Your Finances Organized

If there’s one thing that can help you manage your money effectively, it’s keeping your finances organized.  Personally, I’ve found the easiest way to do this is to use a completely customizable spreadsheet to store all of your banking transactions.

Why You Should Use a Spreadsheet

Why this method, when some people argue that all of this information is already found in your online banking?  Well, all of the information in a spreadsheet like this isn’t found in your online banking.  Most online banking transactions are not clearly labeled.  For example, if you wrote a check for something, you’d get the description “check #101” instead of who the check was paid to, or what the check was for.  Of course you can go back and research these types of transactions when it comes time to do your taxes or create your budget, but it will be very difficult to remember exactly what they were for. That’s why by using a spreadsheet to track your bank expenses, you can easily put things in terms that you will understand.

keep your finances in a spreadsheet

All of this can be stored in one small spreadsheet

In fact, there are three reasons why it pays to keep your finances organized this way.  First, it keeps your checking account organized and balanced.  By recording your transactions in a spreadsheet you will be aware of outstanding checks or transfers that haven’t hit your online bank account yet.  You’ll be more on top of your finances and you will have a much smaller chance of overdrafting.

The second reason it makes sense to use a spreadsheet is for tax purposes.  Most of your itemized deductions flow through your checking account.  Whether its your property taxes or your license renewal, by having all of these transactions for the year in one spot and easy to sort and find, you can do your taxes much more efficiently.  Also, since you can mark the tax related items in your spreadsheet, you won’t miss as many tax deductions and it can potentially save you money.

Finally, by using a checking spreadsheet you can easily transform your checking transactions into a budget by using a simple pivot table.  Whenever you enter a transaction you categorize it into a particular budget category.  At the end of each month or each year, you can pivot your data into a budget summary in just a few seconds.  We have created a video to show you exactly how to do it that can be found here.

A Tutorial on How to Organize Your Checking

Getting your personal finances in order is pretty easy with this method.  I’ll cover the basic steps and then you can watch the video below that shows you how to do it.  I also included a link to the checking worksheet below for your download.

To start, open up a spreadsheet.  If you don’t have one, you can use Google Docs or OpenOffice.org for free.  Then, list a column for date, source, amount, balance, category and description.  If you also want to put flags in for tax purposes, you can add a column for tax flag and then just put an “X” in any row that is tax related.  At the end of the year you can sort your transaction on this field so that you don’t miss any deductions.

The next step is to fill in each field with transaction data.  A transaction is any type of activity in your bank account that causes the balance to change.  I define the fields as follows:

  • date – the date the transaction occured
  • source – the source of the transaction.  some examples are debit, online banking, check (just enter the number), transfer and atm
  • amount – the amount of the transaction.  deposits are postive and withdrawals or payments are negative numbers
  • balance – an ongoing total of your bank account.  this should represent how much money you have left in your bank account if everything has cleared
  • category – this is used for budgeting. each transaction should be classified as detailed as you want. some examples include income, transportation, mortgage, dining out, entertainment, etc.
  • description – this is something that will easily remind you of what the transaction was. it could be a business name, an event, or just a summary of the transaction

The final step is to occasionally check your balance against your bank account to make sure that everything is balanced.  If there are discrepancies, you’ll have to balance your spreadsheet just like you used to balance your checkbook.

Now it’s time to see how this works.  You can watch the video below to see how I set up my checking spreadsheet.

Hopefully the video was useful, as it can help you visualize how to make a checking template yourself.  Now, if you’re interested in starting with our spreadsheet template, you can download it here:

That concludes our tutorial.  Do you have any suggestions or want to share how you keep your personal finances organized?

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