Friday, August 10, 2012

Yearly Cash Flow Spreadsheet

I would like to write up a couple of blogs. One about how I do my family budget and the other on how I keep up with all of our household bills. This one will be about my personal family expenses. I hope you enjoy and learn something that you can put into action within your own household! :)

How many of you know how much debt you owe out as a household? I mean really really know? I can honestly say that I know each and every month how much my husband and I owe in debt.

I have a BIG Christian faith so everything in my life, I TRY (not perfect by far) to live by what the Bible tells me. The bible speaks a lot about money! Did you know that? Here are a couple of scriptures I ponder while thinking of my finances..

Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.

The rich ruleth over the poor , and the borrower is servant to the lender.

The first one is always in the forefront of my mind when thinking about debt. "Owe no man anything, but to love him." Wow, I could about preach a sermon on that one.. Good stuff! Anyway, as we can see, debt is not a good thing. It affects our outlook on life, our mood, our relationships with family, friends, spouse, and even our relationship with Christ. So with that being said, the reason I did this yearly cash flow chart to begin with was two fold. One, to see where my money was going so I could be a better steward with what the Lord entrusted to me and two, to get out of debt! Plain and simple. Good reasons right?

I have been married 14 years and I have to say I have been doing this since day ONE of my marriage. I can dig back through paperwork from where I was writing it all out by hand. I kinda miss it! I think about going back to the paper version. Both paper and computer have their pros and cons, so for now, I do it on a spreadsheet on my computer. :) Saves me from having to keep up with a calculator all the time. lol All I do is put in a number and it all adds itself up for me. Hey, I told you I'm OCD about my finances! lol You'll see as we go on.

Ok, let me try to do this.. without giving out to much of our personal info.. HA I'm going to change almost all of our debts and change the amounts we pay out. I'm sure y'all all understand that.. ;)

These are my steps when I put my "Yearly Cash Flow" chart into place.

1. I wanted the whole years worth of expenses on one or two pages, max, so across the top I have labeled Jan-Dec.

2. I divide all of my bills up into 3 categories. Bills to be paid out/mailed on the 1st of the month, the 10th of the month and the 20th of the month. These are the only 3 days of the month I pay bills. Talk about simple! This is where my budget plays such an important roll. Any bills due between the 7th and 16th of the month are paid on the 1st of the month. Bills due on the 17th through the 26th of the month are paid on the 10th and those due between the 27th of the month through the next 6th of the next month I pay on the 20th. Make sense? This is helpful to anyone who makes a habit of paying bills late. Paying bills late just cost you more money, so we want to prevent that from happening. It is possible to eliminate those late fees.

3. So, going down the first column of my spreadsheet I have listed each bill or expense, starting with the list of bills that are paid out on the 1st of the month.. After that, I list those paid on the 10th, than the 20th. I put all of the bills that are paid once or twice a year at the bottom of the list. This helps me to start at the beginning of the month and work my way down the page without searching out the next bill I need to pay.

Note: These bills/expenses on the spreadsheet are only fixed expenses like power, water, credit card bill, phone, mortgage, insurance, etc. I do not include changing expenses like groceries or clothes because these items don't incur late fees by not buying them. These are items that you buy if/when you have the money. Good, bad, up, or down, through the years I have always paid my bills FIRST. Than I bought groceries and if anything was left it went to other things we needed in our home. Trust me, it has been to that point where we had less than $50 a week to feed a family of 4. Maybe less.. Its been so long, it's hard to remember specifics. Maybe I should have written that down too? lol Anyhow, back to the task at hand..

4. Beside each bill/debt I have how much the bill is for the month and how much I paid. Not all bills have to be paid in full each month (example: credit card bill, insurance, etc.) So knowing how much you owe, how much you paid, and how much you still owe on that bill is important.

On regular bills I just put the amount owed in that month and the payment on the line below it. On others, like line 4. the loan. The first line is how much is due that month, the second line is the payment, and the third line is the balance. At one time I was even keeping up with the amount of interest I paid on each loan. Can anyone say OCD?

I have debts in red so they're easy to see. I have my spreadsheet automatically set up so when I type in a payment, it automatically adds it to my monthly payout at the bottom of the spreadsheet. When I type in my balance it automatically adds it to the bottom as well. Do you know how much of your income goes out in bills each month? At the end of each year I reflect on the debt we had at the beginning of the year and what we had at the end of the year. What debts we paid off and which new ones we incurred.

It's easy to see if I missed a payment and can catch it and pay it (hopefully) before it becomes past due. :) No need for extra files to keep up with BILLS. This also.worked when we were self employed. I was able to keep business and personal expenses separate and had one piece of paper on hand when I filed my taxes at the end of the year. :)

If you are interested in setting one up for yourself or me helping you to set one up for you on your computer, let me know. You'll need a spreadsheet app on your computer. Mine is Microsoft Works Spreadsheet. I could even write up a blog on how I set up the spreadsheet to do all of the calculations automatically for those that do not know.

Don't forget, this can also be done with a pen and paper. You don't need a computer. They have green spreadsheet paper at Walmart. I LOVE this paper! I used this for my budget back in the day as well. :) Don't have to worry about computer crashes when it's written in ink! :)

(This is a 6 column you can do 6 months at a time on. They also have a 12 column pad to do a whole year on.)

Here's a sample "Yearly Cash Flow 2012" spreadsheet!
As you can see, I still have my water bill and vehicle bill to pay this month. :)
I've used this method quite a few times to get us out of debt. If I see that my balance is close to the next $1000 platform, I may pay extra that month to get it below that threshold. Example: The Land debt... The August balance is $2340.93. If I wanted to go below $2000, instead of paying $150 or $200, I would pay like $350. Unfortunately, I didn't have it to pay this month because hubby started a new job after being out of work for almost 3 months with no income, so I was paying only what I needed to. I hate paying the minimum payment on anything! lol I'm hoping to go ahead and knock out these debts as we build our home DEBT FREE! I believe! I believe! I BELIEVE!
This is a passion for me and it's my goal to help families to live free from debt even with the smallest of incomes. If we could do it, anyone can!

This is one topic in your life that you have to get mad at to see change in it. I literally HATE debt! You have to get to the point that you hate it too. See it as I do.. As bondage. It keeps us from having and doing what is purposed for us to do in life. Personally, we have been way over our heads in credit card debt before and with the Lord's help and guidance, He helped us pay it off. Now on my credit card debt you see on this page, I pay the bill off every month. I don't plan on paying anymore interest than is absolutely necessary.

Feel free to share your goals and achievements with me. I want to celebrate them with you. As you can tell with my goal to build my home debt free that I believe with God, anything is possible!

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