Be your own financial planner

Use technology to stay on a budget

By Liza Finlay

Vivienne Wychwood* is what she calls math impaired. She becomes so overwrought when forced to calculate anything — her portion of the lunch bill or the change due at the grocery store — that she relies on those around her to do all the figuring.

Use our template to create a simple monthly budget.

But allowing others to manage your money can be dangerous. What happens when they’re not around or they’re wrong? Using calculators is a start, but other, more advanced tools (such as simple spreadsheets and user-friendly software) make it possible for even the most math-challenged to map their finances.

It all begins with a budget

Even before launching any financial-planning program, you must first buy into the concept of budgeting, says Wayne McLeod, a certified financial planner in Toronto.

Enter all expenses for one month to get an idea of how much you spend overall.

Budgets get a bad rap, he says, because people think they’ll have less money to do the things they want to do. “Wrong. A realistic budget locates where dollars are being spent so you can prioritize where you’d prefer your money to go. So a realistic budget may allow you to do more,” McLeod says.

Here’s how to get started:

Account for income using your after-tax net.
Create a thorough list of expenses, including fixed costs (mortgage or rent, utilities and loan payments) and variable costs (food, entertainment, gas and, yes, those tall skinny chai lattes).
Factor in bank service charges.

Now grab that mouse. Using a basic Microsoft Excel spreadsheet, create four columns:

monthly income figures
fixed expenses
variable expenses
goals

You can use an alternative program such as Microsoft Money. It will ask you how many columns you’d like and allow you to fill in the figures.

The beauty of using software such as Excel or Microsoft Money is that you don’t need to do any calculations — the computer does them for you. Even better, you save loads of time because after you’ve plugged in the numbers, you never have to enter them again.

Track your spending

McLeod likes Microsoft Money and Wealth Creator, but even Quicken will allow you to see 12 months at a time, so you can really track spending. If you prefer to see a graph, each program can create one, adds McLeod.

It’s not just about where your money goes — you also need to decide where you want it to go.

The planning comes in when you subtract the figures in the expense columns from the figures in the income column to see what you’re left with, says McLeod. He then offers these pointers for planning perfection:

Once you’ve seen where your money is going, map out where you’d rather see it go. List all goals, so you are motivated to stay on target.
Set up accounts for your most important and achievable goals. For example, you may want to create an account for travel and another for the kids’ registered educational savings plan (RESP).
Pre-authorize payments to those “goal” accounts, making it tougher to ditch the RESP payment in favour of an impulse buy.
Look for ways to free up money. Consider using another bank if yours charges high service fees. Automate bill payments if you’re constantly paying late fees.

Visit Microsoft Office Online for more helpful budgeting templates.

Technology does more than save time; it puts the dreaming back in financial planning. Wondering how long it would take to save for that once-in-a-lifetime trip to Tuscany? The answer is just a click away.

* Names have been changed.