Recently, Trevor from Financial Nut wrote about how he handled a problem that I used to face…..how to organize savings so that you can know how much has actually been saved for a particular goal. As he did at first, I only keep one savings account into which I dump everything (except for my downpayment fund), and if it wasn’t for the spreadsheets I keep it’d get very complicated, very quick.
I don’t have sub accounts, because I figure my goals change fairly often, and depending on my moods I change my contributions to each goal, or I take money from one and put it in the other on a whim (relatively). I prefer doing all this work in my own spreadsheet instead of actually moving money around in subaccounts.
My system might be overly complicated for some, however it works for me, and maybe it’ll give ideas for a way that you can organize a spreadsheet to give you the information that YOU need. For me, the most important part was to make it easy for me to move money around without making mistakes, and to be able to look ahead and project how much money I’ll have in savings by a particular date. I wanted a “big picture” view, as well as lots of detail. The result was a confusing looking spreadsheet that isn’t so bad once you get used to it.
So, a little overview of how I save:
Every week my savings gets an allowance $78.00, this is what I call my “Short Term Savings”. My “emergency fund” savings right now comes from the money I’m budgeting for my future housing expenses….on my spreadsheet its called “Total Extra”. In theory its supposed to contain any raises that I don’t want to include in my general budget, and any unexpected income.
For the most part, that $78 is divided evenly between whatever savings goals I have. At the moment its 1) E-fund, 2) Gift Fund, 3) Vacation/Travel fund, 4) Car Fund. If at any moment I’ve reached a goal, or I want one to have more weight than another I can adjust the formulas any which way. The extra money is manually added into whatever category I want it to go into (right now, the Efund). If I wanted to, I could also split this evenly between all goals.
The final column you see with no header is how I make sure I don’t have any mistakes. if the actual balance of the account is NOT equal to the sum of all the funds….something went wrong. If I see 0’s, its all good!
The bad thing about my system is that this will only work if you have a steady savings amount each paycheck. Otherwise you will manually need to adjust the input every week, and that’s kind of annoying. I definitely adjust at least once a month (usually closer to every week, lol) so that I can account for any interest earned.
Oh, and as each week passes I’ll hide the row to unclutter things up a bit.
So if I want to figure out if I’ll have enough money for that $800 vacation in May I can just look at my spreadsheet…..and NO. I’ll have just $555.27 by then. If I wanted $800 by May 1 I’d have to start saving some more!!
I do the same thing for my “long term expense” savings account….which is how I pay for my car insurance, phone, or any of those other expenses that need to accumulate throughout the year (I realize the phone is every month, but some months I spend a little less, so I track it as well).
Now, I’m curious….do any of you use any crazy systems of your own? Do share! (I always did love “show and tell” in pre-school….)