@ Ian, a lot of people like to use cash to limit their spending. I’ve never thought that paying with plastic felt any less painful than paying with cash, although if you don’t allow yourself more cash until the 1st of the month, that would certainly keep you from over-spending. I’ve never been a fan of complicated software, and Excel always seems to do what I need. I didn’t know about conditional coloring, but it could be very useful.

@ Catherine, being a non-coffee drinker, I’m quite happy to use Starbucks as an example, especially since we now have the term “the latte factor.” Starbucks is doing nothing wrong, just making a product that many people can’t get enough of. And if someone loves coffee, then maybe it’s worth spending lots of money on. The important thing is to be aware of what you’re spending, so you can decide if it’s worth it. And regarding the sandwiches, if you could save a fortune by taking one to work, I wonder how much you could make by taking extras to sell to people! People would think you’re crazy, but if everyone needs their daily Catherine’s Sandwich (TM), it might be worth it.

When I was younger, I couldn’t understand where all my money was going. Then I realised that I could save an absolute fortune by taking a sandwich to work with me, instead of buying one there.

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Having been there and done it on the overspending, rather than create the expenses sheet, we took a different approach. Leave the plastic at home. And use cash. Once the cash has run out, no more lattes! We can’t go over-budget.

Will we stick to it? Probably not! And then I’ll come back and download the expenses sheet to shock us at how much we waste on incidentals.

I love conditional formatting in Excel. If you have a budgetary area, you can colour every figure black that is below budget, and red when it’s over-budget.

And each one can have a different budgetary figure.

We used to use accounts software in business, but it was so darned complicated to get useful information out that mere mortals could understand. The software box has been uninstalled and is now gathering dust on a shelf.

We’re using Excel. And paying a tiny premium to our accountant to interpret the summary cashflows, pivot tables and ledgers. And they all feed into each other so much of it is automated.

It helps us work in the real-world and lets the accounting conventions be handled by our accountant.

And we’re back in full control of the business with better analysis, colour-coded figures which leap off the sheet to warn you of potential problems in later months (and give you time to prevent them!), and a far simpler interface.

It’s also easy to run an ad hoc report or analysis on a given cost or income area. For example a margin analysis on a particular service or product line.

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I don’t know of how many times I have seen people, including employees of ours, complain how they can’t make it from check to check, but yet I see them carrying cups of coffee from Starbucks or the local coffee stand. At times, I have suggested that “maybe/possibly the problem is right under their nose”. At $3-$4 a pop, it adds up fast.

Hunter, this is a great eye-opening post for people who wonder why their are consistently going over their budget.

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