A little financial help...

Branches of Birch
Nov 20, 2018
7 min read

Updated: Jun 17, 2020

Every person in this country needs to keep track of their finances. When you are a family, whether it be a single parent family living on benefits or a working family of six, you are responsible for the lives of others. They depend on you to provide support and make the right decisions for them to survive.

Unfortunately in this country we are not all taught how to handle our money. Some of the population do not know how much they spend or how to keep a household budget, they end up in such financial dire straits it affects them, not only through the piling up of debts and possible financial agreements, but huge amounts of stress and panic. The 'norm' is to buy things when we want them and not when we need them. To have the "now, now, now," attitude means a lot of people have never learned to save and easy loans and credit cards can make it very simple to end up in distress over your financial position, especially if you're not financially inclined or find it difficult to follow or understand.

I'm not going to try and lecture you on whats best for you or your family, how you choose to spend your money or why you made the choices you have. I am going to move forward under the premise of 'you did the best you could with what you had.'

You also could be someone who is very financially minded and careful with their money, but maybe you don't know much about computers and find the thought of setting up and managing your finances in that way overwhelming and even more difficult, or perhaps you're good at it all, but just never got round to setting anything up.

I was very lucky, I have two loving parents who are both very supportive and also very good with their money who taught me. They started with nothing (I do mean nothing!) and had no support financially, but it was their attitude towards living and their finances that has meant that they now have two houses, with no mortgages or debts and have happily retired early to live their dream, which is awesome. Some people are not as lucky as I was and did not have the examples and advice I have had to follow. Though I have made mistakes along the way, as everyone does, mistakes are how we learn, so lets learn from them and move on.

On the 'Easy Living' tab is a free download of an excel spreadsheet, it is very similar to the one I use to manage my own household finances, though I have tweaked it, so it is more generic. It is very easy to use. I use this system every month to keep track of our finances and it really does help, doing some of the work for you (you'll see).

Without further a do lets have a butchers and work though it together.

This is what you should be greeted with, but there is more to the spreadsheet if you scroll down.

The first column is for the date your money comes in or the date your direct debit comes out or the date payments need to be made. I usually put DD before the date if its a direct debit so I remember.

The second is a description of the money coming in or any items that need paying.

The other columns are the months of the year.

Now lets look at the rows. From the top- there is the heading 'Income', below this you would enter absolutely any money you have going in to your account or purse. I have put in some common things, but you can add more.

The next heading is 'Outgoings', below this you would enter every type of expenditure you have; whether it be direct debits, school dinners, food for your pets or yourself, it all gets put down on here. If you often buy yourself coffees, keep your receipts for a month add them up and give yourself an idea of what you spend on that. It can be quite enlightening if you, like I, are a fan of a takeaway! Again, I have entered some common ones but you can always add or takeaway rows, I'll show you how at the end in case you are unsure on this.

The next heading is 'Repayments' which just makes debts sound nicer! So, enter everything you owe in this section, if you have more- add more rows.

After that there is a section for 'Savings' and then I have an additional part for 'Extra Mortgage Payments', as these things need to come after you have paid everyone else back.

Okay, so now we've gone through where everything is, I'll now go through how it works.

As you enter each income for the month, this spreadsheet will add up and give you a total of everything. This is where you feel a bit flush!

Warning: don't edit the 'Total' or 'Remaining' sections or this will not work and if you do it accidentally press undo!

Then you add in all your outgoings, and be more accurate than I have- be sure to put the pence in too.

Again, as you add your bills to pay and direct debits, the spreadsheet will add them all up and total them at the bottom. It will then deduct the outgoings you entered from the income and give you the amount remaining.

I know what your thinking, "I felt so good a minute ago!"

Wait you'll feel worse in a minute, next is what you owe!

Next you add your monthly debts to be paid to the repayments section. I recommend you pay off your credit card every month so you don't pay interest but, at the least, round up the minimum payment on your credit card to the nearest 10. Then you're always paying over the minimum, no matter how small it is it all helps. If you can, round up to the nearest 50 or 100.

Okay, so same again, the spreadsheet is adding up your monthly debt payments and totalling them at the bottom, this amount is then taken from what was remaining after you'd paid all the outgoings.

You now have another 'Remaining' figure underneath, this is what is left after you have paid everything you should. If this is a minus amount, then you need to make savings, cut back on those coffees, economise your grocery bill for example. If you shop around for your gas, electric, broadband and insurances, this often can save £100's of pounds a year. Please note I have not included your mortgage in this section, as I chose to count this as an outgoing. If you want to call a spade a spade though, stick it in repayments. The reason that I chose not to is simple, the aim is obviously to have nothing in the repayments section at all, if you have 20 years remaining on your mortgage then you are always going to have that red section haunting you. Some might say this is silly...I say it's psychology!

For all those finding themselves with a few extra pounds, under the 'Repayments' you have 'Savings'.

You can obviously add in different things you are saving for. I have put in Savings for a holiday but also Birthdays, Christmas and Events so you can save all year round and ensure you are not caught short and get in debt over those. 'Events' can cover anything really, be it a possible wedding you'll need to buy a gift for, going out to a concert or to see a comedian.

The 'Contingency' is brilliant! Essentially you are going to save up a pot of money amounting to £2000. It may not be easy, but it will be worth it. This contingency fund is your insurance. If something breaks you can now fix it without having to borrow money to do it. No longer will you have the need to take out that extended warranty, as you are covered. When the car breaks down, you have the money there ready and you are prepared for the utter crap that life inevitably slings at you at the worst possible time. When you have to dip in to it, you can save up gradually again to top it back up. You won't need a credit card, as you have made your own 'credit card' and you aren't paying interest for the privilege, you are receiving interest!

Saving £2000 takes time and may sound far far away to you, especially if you have debts and while in the process of paying those off, find things break and have to get in debt to fix them. Please don't be disheartened, it is good to have aims and you can do this! It may seem difficult now, but one day, today will be the past and you will be where you want to be.

The basic principle of this method is to enter everything in for the months ahead, then you can plan ahead. At the bottom of the sheet you will see tabs with years on so you can plan those out too. It's not going to be completely accurate when you are preparing for the future, as we don't yet know what the future holds, but you can work out how much more you will be better off when that loan is repaid, and think about how you are going to use that money to improve your situation. It could mean, putting that monthly amount you were paying, towards another debt or saving it up for something nice. It's your choice how you use it, it's your money.

This system takes time to get used to, and once you do, it is worth it. Every time things go in or out of our account I change the colour of that square to say 'thats done'. This way I know what is left to pay and what to expect out next and make sure the money will always be available.

So simple instructions for this excel spreadsheet:

As I said earlier, don't change the total or repayments boxes, these contain the formula which adds everything up or deducts what needs deducting. If you do, it will not work. If you do it by accident, press undo!
If you want to change the labels, for example-'school dinners' to 'cubs or scouts standing order', then just click the box and start typing. It will automatically delete what was previously there.
If you want to insert a row then I suggest you do this in the middle of the section you are adding it to, so not to mess up your layout. Just right click the number (on the left axis) where you want to add the row and click 'insert'
If you want to change the colour inside of the box once that money has come in or out, as I do, then you need to click the down arrow to the right of this button (below) on the tool bar and select the colour you want.