Posted by: spaghettipie | November 28, 2007

WFWM: The Master Plan

wfmwheader.jpgI alluded to it yesterday, and so today I thought I would share in more detail what works for me in managing our finances.

First, a little background. I’m a numbers girl. I balance my bank account to the penny, every time, and when it doesn’t work out right it drives me crazy. My husband? Not so much. When we got married, he brought to our marriage MONTHS of UNOPENED bank statements. When I asked him how he knew how much money he had in his account, he replied, “I just call the bank to get my balance.” I tried explaining that doesn’t include what has yet to clear his account . . . but that didn’t seem to bother him. So, after a few months of marriage, we began to notice that our bank account stayed fairly low despite the fact we both had well-paying jobs and neither of us were exactly wild and crazy with our spending. We perused the check register and realized that we were spending a lot of money on incidental runs to the grocery store. We needed a budget.

Enter the Master Plan.

A friend of mine gave me the template they used to track their expenses, and from that, I created what we refer to as the “Master Plan.” We’ve refined it over the years to better suit our needs, but in a nutshell we can see how much we have spent in a certain area (like gas, entertainment, groceries, electricity) or at a certain store (Chick-Fil-A, Target, etc) by months or total. The spreadsheet uses several worksheets and tracks our expenses and budget, calculates our variance to the budget each month, and tracks how much we’ve spent on each credit card each month. We use our credit card like a debit card so that we can get points, but we still track our expenses as if they were coming right out of our account. We pay the credit card completely off every month. We allow no excuse for letting a credit card bill roll over to the next month; we transfer savings on the rare occasion that we’ve overspent.

We each save our receipts from our credit card purchases. I try to sit down once a week and load the receipts into the spreadsheet, as well as any bills that have been paid. My husband is in charge of paying the bills. While it would be easy for me to manage the entire process since I’m more of the financial-type, it’s good for my husband to understand how much our bills are and be involved. I’d suggest in any relationships that both parties have something to do – even if it’s just checking the bills off that they’ve come in and that they’ve been paid.

Now that we’ve done this process for several years, we can take the previous year’s expenses and better predict and budget for the next year. It also helps us easily identify where we need to make changes.

Anyway, that’s a small glimpse into how we handle our budgeting. If by chance you are interested in the spreadsheet itself, email me.

For more great ideas and tips, check out the rest of the Works for Me Wednesday posts.

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Responses

  1. That’s very similar to our approach, but my husband is the main record keeper in our marriage. I agree about paying off your credit card every month if you can–that interest can really get you!

  2. I use a family budget that I was able to download for Microsoft Excel right through the Excel program. I really love it, and it helps me to see where our money is going. I just need to get better about totally sticking to that budget!

  3. We used an excel program at one time. It worked well, but kind of fell along the way-side. I would be interested in seeing your spreadsheet if you don’t mind. Thanks for sharing!

  4. I would love to try using your spreadsheet. Could you email it to me?

  5. A – Thanks for stopping by. Yes, it’s one thing to create and even track your budget . . . it’s a whole other thing to stick to it! We still struggle with that, too.

    Tiff and A – I’d be happy to share. Let me clean it up a little, and I’ll email it to you.


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