Closing Out The Monthly Budget

It’s Finance Friday and I thought I’d talk about closing out my monthly budget. I usually do it on the last Sunday of each month because I usually have some time on that day (if not, I do it across a few weekdays). I want to share a bit about my process. For the record, I use an Excel spreadsheet so that I can customize everything any way I want.

First, I make sure that all receipts have been entered. I go through my bank statement online and all of my credit cards to make sure I got everything. I try to log them as I get them during the month, but do sometimes miss something–usually something I’ve bought at Amazon (infrequent) and forgot to enter.

Second, I compare my monthly result to previous months and look for areas where I can cut back. I would love perfection, but have to settle for progress. If I could get the medical bills to slow down, that would be really helpful (I need to get a root canal and crown as well as a few other things done).

Third, and this is something that I’ve only recently started doing, is tracking credit card purchases on another spreadsheet within that workbook. I track all credit cards on the same page and enter each individual purchase I’ve made and a general category (eg. gas, household, etc.). That makes it easier for me to see what I want to pay to where. For example, I use my Costco credit card to get gas since it has a 4% rebate on gas. I want to make sure that I pay for the gas I put on there. I had medical bills and some purchases for the goats over the summer and all three of my cards are fairly full. I track each purchase to make sure that I’m paying off new purchases as well as trying to make a dent in the old ones.

I then go through all of my envelopes, put in the monthly allowance for the new month, and make sure that what’s in there is what’s supposed to be in there if I had any left over from last month. Since I’m putting gas on my rebate credit card, it’s usually not too much. If you don’t already know, the envelopes are based on Dave Ramsey’s advice. It is based on the idea that it hurts more to spend cash than to use a credit card, so you’re more likely to spend less if you force yourself to use cash.

It’s kind of involved and takes a while to do at the end of each month, but I feel like I have a much better picture of where I stand when I do all of the steps.

Do you close out your monthly budget at the end of the month? Tell me how in the comments!

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