In my last post, I wrote about the first step of budgeting, i.e. tracking every single expense you make. It may seem tedious, but trust me on this one, it’s worth it especially if you’re clueless as to your cash flow like I am. Countless nights I’ve partied away with $100 in my purse, only to find a few scraggly dollars at the bottom of my bag the next morning without a clue as to where the money went. Sound familiar?
Step 2: Download Pearbudget
So anyway, after taking note of my expenses, I realised that I didn’t possess the proper knowledge of designing complex spreadsheets with fancy macros and widgets to analyze my cash flow. That’s when I came across Pearbudget, a nifty spreadsheet created by Charlie Park for money morons such as myself. The wonders of the internet!
Download Pearbudget for free here.
Tip: Pearbudget can be used on any spreadsheet program, but I chose to save mine on Google Docs, so I can access it from virtually any terminal with an internet connection.
Step 3: Understanding How Pearbudget Works
The great thing about Pearbudget is that it’s easy to grasp after using it a few times. The most important thing to understand is that there are different types of expenses.
If you open the Start Here tab in Pearbudget, you will see that expenses are broken down into three categories:
- Regular expenses: These are expenses that you pay every month in regular fixed amounts, e.g. rent, phone bill, mortgage, car loan, etc.
- Irregular expenses: These are expenses that you pay a few times a year at irregular intervals, e.g. gifts, medical bills, haircuts, etc.
- Variable expenses: These are expenses that you pay every month, but can be budgeted differently from month to month, e.g. groceries, drinks, dining out, etc.
Tip: Focus your budgeting efforts on variable expenses and your bank account will thank you.
In the final installment, I’ll explain how to input the expenses you dutifully jotted down into the Pearbudget spreadsheet for budgeting success!
