2017 Financial Planning

Here is how I plan my finances every year for the upcoming year. In this case I did this at the end of December 2016 to cover 2017. There are 3 spreadsheets I have created and work on throughout the year.

  1. Expenses/budget
  2. Monthly Account values
  3. Income details

Lets look in more detail at the expenses spreadsheet. In reality, this is the most important of them all, as it keep a track on all the expense in the month and compares them to my monthly budget.

I start with a tab that calculates all my expenses and expected income for the year -I call it “Can I afford it 2017”.

  • I tabulate the costs for our rental property:
  • Known expenses for our current home and living costs (property tax, utilities, $500/mo for house repairs, insurance, DMV, tires, car repairs)
  • Education costs for the children (university, tutoring, SAT, college applications)
  • Health insurance (Insurance, estimated doctor visits and prescriptions)
  • Other costs per month (I assume $80/day to cover food, eating out, clothes, gas, everything that is not covered in other areas)
  • Vacation budget.

I add all this up and calculate my total costs per month and per year (MONTHLY BUDGET). I then tabulate all sources of income (dividends, salary, rental income). If Income is > Expenses then all is good. If Income is less than expenses then we need to look at making an adjustment. Things look very good this year as our son is graduating therefore reducing expenses and I found a much cheaper health plan.

I then have a tab for every month of the year, and I list all the costs for that month. In our case it is (Visa, Health insurance, General insurance, Gas, Electric, Water, Cable, Verizon, Flute lessons, Gym, Money for college, Medical and Cash). I should explain that the Visa is used for all daily living expenses as well as cash, and I pay of the Visa every month in full (this is very important).

Out of bank account
$0.00 Visa
$0.00 Liberty Healthshare
$0.00 General Insurance
$0.00 SDG&E
$0.00 Water
$0.00 Cable
$0.00 Verizon
$0.00 Gym
$0.00 Flute
$0.00 College
$0.00 Medical
$0.00 Cash
$0.00 Rental Costs

At the end of the month I calculate TOTAL EXPENSES and compare to MONTHLY BUDGET. Most months it is positive, but I have 2 months in the year when it is negative due to property taxes. There may be another month due to a high vacation cost.

That is all there is to it to making sure you have a budget that you develop, and then do everything you can to stick to it.

In later posts, I will discuss the Monthly account values and Income spreadsheets.


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