Visualize your check book.

Your check book is that small 6 inch by 3 inch paper pamphlet that the bank gives you, right? WRONG! You choose how you balance your check book and keep a running journal of ins and outs in your check/savings account.

One thing is certain though - YOU NEED TO HAVE A CHECK BOOK!

My recommendation is to use an online program or database software to manage your check book. Don't want to spend a lot on software? You don't have to. Microsoft Money or Microsoft Excel everyone has access to - and most of the time it comes with your operating system on your computer.

This spreadsheet or software is for smart people right? Um, no. Microsoft Money is simple, and has tons of other options that can help you learn to use your money better. So you need easier? Excel is even easier. A simple Excel spreadsheet is easy to create and use. Here is how I would set it up:

1. Open a new workbook
2. Save it on your hard drive as "Checkbook - 010108" (that is the date).
3. In cell A1, put "January 2008", in B1 put "1" for day.
4. Copy down in column B the days from 1 to 31 for January days.
5. In cell C1, put "Bills" and in cell D1 put "Deposits"
6. In cell E1 put "0" (this is your opening balance in your account - if you have an opening balance, put it here as a positive number)
7. In cell A2, put "Mortgage #" (this assumes your mortgage is due on the first of the month)
8. In cell B2 put "-1000" (this assumes your mortgage is $1000 - put whatever number is correct - remember, bills are negatives and deposits are positive numbers)
9. Cell C2 is "0" or blank - because this is not a deposit - it's a bill
10. Cell D2 is a formula "=D1+B2+C2"
11. Copy cell D2 down the entire column D
12. Now, put your bill descriptions into the Column A throughout the month - for example I would put "Phone Bill #auto" on the 9th of January (it's due on the 9th), and I would put "-$100" in Column C for my estimated phone bill expense. The reason I put "#auto" in there is because that bill automatically comes out of my checking account on the 9th.
13. Another example is my Truck payment - I put "Truck #" in Column A next to the 16th of January because my truck payment is due on the 23rd. Why did I put it on the 16th then? Because I have to mail the check early enough to get there by the 23rd. This is my reminder! Also, when I actually write the check, I will go back and change the description to "Truck #1234" - the check number I used was #1234 in this case. This helps me keep track of the checks I've written.
14. Basically enter all your descriptions in Column A and the estimated amounts in Column C. Remember to put bills in as negatives and deposits (in Column D) as positives.
15. By putting in estimates, you are scheduling out your expenses over the course of the month and setting a buget. This helps you visualize your expenses and how much you save or spend.
16. As the days pass in January, you will put in the actual amounts you spent on those expenses (change the round numbers to the actual amounts down to the penny).
17. After you set this up - Copy all of January to February - and March through December. This basically is building you a budget.
18. If you do two transactions on the same day, you can add a row (remember to copy the balance down though!) very easily.
19. Don't forget those pesky once a quarter/year bills - like pet insurance, excise taxes, HOA, etc. Put those in less than once a month!
20. Put only one bill/withdrawl/deposit on one line.

After you create this spreadsheet you can see how I build it out for the whole year. This pretty basic spreadsheet will help you to visualize your check book and money.

So why put your check book on the computer? Well, for starters, it is easier than lugging around a paper check book that gets ratty and could get lost easily. It also teaches you how to use computers better (that one was for all those people that need to get better acquainted with the keyboard - HI MOM!). It will also help you visualize your expenses. Why visualize it? Because if you can see upcoming bills and know when they are due, there are less surpises during the month. Hopefully this will help you plan your money better and not over spend.

This spreadsheet will also help you plan ahead and save money. You can track items by categories as well by using consistent names. This would require a little bit of Excel formula and pivot table skills - but it can be done.

Remember to always keep copies of your checking account spreadsheet or program on a separate disk/hard drive or email your self a copy to your internet email address - so you always have a copy if your computer takes a dump or you somehow mess it up.

To summarize - visualize and organize and you can make better use of your money!



Good luck!