How To Organize Your Expenses ALL YEAR!
Hey guys!
As you may know.. I love to organize and there's nothing more satisfying than having all your finances in order. AM I RIGHT. Plus, tax season is just around the corner so I hope this helps organize your 2017 expenses as well!
I've been a full time blogger for over 2 years now and since I'm technically an independent contractor, running my own business, I've learned that the more organized I am everyday, the less headaches I have later. It also makes tax season WAYYY LESS dreadful and keeps me in check with my budgets and spending habits.
If you are someone who has no idea what your spending on and where your money is going (this was me before) it's easy to OVERSPEND and not have anything left to SAVE. Now that I'm approaching 30, my goals are to SAVE SAVE SAVE and INVEST $, so let's get started !
Note that I am not a professional accountant or financial coach and these are just my personal organization habits that have helped me: )
CONSOLIDATE
I have a seperate credit card, checkings account and savings account for my personal and business expenses. My financial coach advised that I do this to save me the hassle of separating everything out when it's time for taxes.
This is why I have 2 running excel sheets that I update through out the year. If you are just looking to track your personal expenses than you only need one excel sheet. The purpose of having one is to log all of your expenses from all different cards and checkings accounts in one place and to be able to collect data and analyze it.
The first step is to start an excel sheet or you can use my exact one here.(read the directions on there, because you'll have to save a copy of it first in order to use it for yourself)
There are also programs like mint or quick books that automatically organize your expenses for you but I don't use them because I'm a micro manager AKA control freak and like to categorize my own line items and analyze the data how I want to.
Next, consolidate! Download all of your credit cards and checking account statements into the excel file. Most online banking services will have an option to save as .xls or you can call your bank if you are having trouble finding it. The main data you are trying to collect is Account #, Date, Vendor, Amount $, and Category.
On my bullet journal I have a list of all of my account #s so when it comes to downloading statements, I can check it off as I go and not worry about missing one.
The Account # and Category should be the only columns you'll need to manually write in yourself.
CATEGORIZE
Once you have all of your expenses on the sheet, start from the top and give each line item a category. For example Whole Foods would be Groceries, Shell would be Gas, Zara would be shopping, Eyelashes would be Beauty so on and so forth.
EXAMPLES:
FOOD
GROCERIES
GAS
PARKING
GYM
RESEARCH
BEAUTY
DOCTOR
SUBSCRIPTION
SCHOOL
SHOPPING
POST
TRANSPORTATION
BANK FEE
UTILITIES
RENT
HEALTH INSURANCE
CAR
TRAVEL
QUARTERLY CHECK-IN
This may sound overwhelming and tedious but here's how I stay on top of it. I schedule it in my calendar every 3 months. That's 4 x a year of ~1-2 hours of work vs. spending a whole week getting your expenses in order at the end of the year. Also it's still the beginning of the year so it's a great time to start!
I have my calendar marked for 3/31, 6/30, 9/30 and 12/31 for a Quarterly Review.
The day of my quarterly review, I'll upload all my expenses from the last 3 months onto my excel sheet, type in the category for each line item and figure out if I'm staying on top of my budget I give myself.
ANALYZE
This is the fun part! Once the categorizing work is done, you can now analyze your spending habits. For example you can find out how much you've spent in groceries last month or how much $ you're spending on COFFEE and see where you can start budgeting more.
A quick and easy way to do this is to create a PIVOT TABLE with the data you have. I listened to this youtube video on how to create one and it was straight forward- ish.
The basic idea is to go to Data > Pivot Table. ( A new tab will open on the bottom and you can switch back and forth from your data to the pivot table)
While on the Pivot Table sheet, you should see "Pivot Table Editor" on the right. Under ROWS , click ADD and add CATEGORY. Under VALUES, click ADD and display AMOUNT summarized by SUM.
BOOM! You will be able to see how much you've spent in each category all at once.
If I lost you already, you can follow the youtube video above or try the below option which I personally am more comfortable with.
OR
Using my excel template identify the FILTER icons along the top (looks like an upside triangle made up of lines). There should be one next to each column header (Account, Date, Vendor etc)
Click the Filter icon next to CATEGORY > click Clear> and then select just the category you want to see. You can use this filter option for every column, whether you want to filter a specific date range (maybe you just want to look at last month vs the year), account numbers or vendor (how much you've spent at Coffee bean etc.)
This feature is AMAZING and you can get creative with what you want to see. Also when you're inputting numbers for taxes, you can immediately get a sum of $ spent on gas, groceries, etc etc.
KEEP ALL RECEIPTS
I use this filing system to keep all my receipts organized by month. My accountant said that if I ever were to get audited, I would need to show proof of my expenses and credit card statements wouldn't be enough! So I've just made it a habit to chuck all my receipts into here when my wallet starts filling up.
BUDGET YOURSELF
Once you have an idea of how much you spend a month, you can really look and see where you can cut down. Maybe you're willing to sacrifice the amount of money you spend eating out for a trip or you just want to lower monthly expenses in general. Whatever it may be, once you know your current spending habits, you'll be able to make adjustments accordingly.
My financial coach is currently setting me on a budget of $300 a week to lower my monthly expenses. This means I have $42 a day to spend on personal things (eating out with friends, shopping etc). It's a goal number I keep in mind and has helped me become more mindful when I think about buying things.
Alright guys there you have it! These are my tips and tricks for staying on track of expenses all year long! If you have ANY questions, please do not hesitate to reach out. Also I would love to hear any of your tips too~
Talk soon,
