Household budgeting

In Boston I could accumulate savings with little effort but since moving to Scotland we have found ourselves short of money. I routinely keep an eye on bank and credit card statements but it became necessary to more properly track our spending and I thought it worth describing what I do.

I have a spreadsheet with a monthly budget. Annual and weekly expenses get converted to being per month. Similar occurs for income, except there are rather fewer lines for that. So, I can check that the budgeted expenses are within our income.

For the non-fixed expenses such as grocery shopping or electricity bills I have a single-entry system where for each expense line item I have per-month ledger cards that receive weekly or monthly credits corresponding to the spreadsheet then our actual spending is debited accordingly. Infrequently I review the current month's ledger cards to ensure that the balances are staying in line.

Some expenses occur less than annually. For those I have a separate section on the spreadsheet that tracks their amplitude, period and phase, from which I calculate two numbers. First, how much I should now have accumulated in savings to be able to meet the expenses when they do arrive. Second, how large a monthly expense line item is required in the main part of the spreadsheet to sustain a sufficient savings rate for these less common expenses.

I find that this approach gives me a good handle on our home finances without being overly onerous. I wonder how it compares to what others do.