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Money Confusion

weather: sunny
outside: 1°C
mood: incoherent

Y'know what confuses me?

I keep a very good record of my spending. My personal bookkeeping system is something of a cashflow analysis. I review every single expense I make and categorize it (the only time I don't is if I get reimbursed). I total up each category and calculate the percentage of my net income. I could do a pie chart, but I like looking at numbers better.

I'm taking everything into account - cash purchases, credit card, debit card, cheques, service charges, auto-transfers, I don't do auto-payments because I feel that I need to actually see the billing amounts myself and actually pay it myself.

It's all fine and dandy. It's helped me immensely in seeing where I need to cut back, I'm happy with my saving progress and everything.

But.

Every month, my total expenses is greater than my two paycheques. Which is not a good thing and I'm workin' on it...

And yet, my main bank account balance keeps increasing. It goes up and down with the pay cycles, but in general, it's slowly creeping upwards...

I must be doing something wrong, counting expenses twice or something. In the last two years that I've started scrutinizing my spending like this, I haven't figured it out. My biggest suspicion is that it's something to do with the credit card, but I'm not sure what. I treat the credit card expenses very carefully because it's easy to double count stuff there. I count the expense at the time of bill payment only. Not at transaction time. It should be okay as long as I'm only counting it in one place, not both.

I guess it's not a problem per se that the bank account keeps increasing. I'm just afraid that there's something huge that I've forgotten and I'll suddenly discover that I don't have enough to cover it. =P

I don't like personal financial software because I can't always see the calculations they're making. At least with Excel, it's my numbers, my formulae, my functions.

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Comments

( 8 comments — Leave a comment )
twilight_bill
Nov. 1st, 2002 11:53 am (UTC)
'I count the expense at the time of bill payment only. Not at transaction time. '

You might not be takeing Float time on the CC's into account.

If you don't pay off your CC's each month is your CC debt going up?
If you do Pay off your CC's each month is the ammount of your credit that you revolve going up?

What do I mean by this? If you are using the Credit Card for more and more things, and doing less out of pocket, or by check then you are not paying for them as soon. By takeing advantage of the float time oc Credit Card transactions (even though you pay them off) you are in effect postponing paying.

Say this month you put $100 worth of clothes on the credit card.
that was $100 of out of pocket expences that can grow in your Cash account.

Now next month you pay the $100, but charge $250 in groceries.
Your chash on hand has effectivly grown $150.

This could only be a reason if you are slowly migrateing to using Credit leverage more and more.


It's just my first "off the cuff" idea. without haveing all the details.
bride
Nov. 1st, 2002 12:40 pm (UTC)
Re:
You might not be takeing Float time on the CC's into account.

I consider the transaction to have happened on the date I pay the bill. If I bought groceries in September with the cc, it's considered October's expense because I pay the Visa in October. I know it's not the best thing to do, but it evens out now that I'm on a roll.

Now next month you pay the $100, but charge $250 in groceries. ... Your chash on hand has effectivly grown $150.

But then next month, the bank account should shrink again when I pay the bill. And I'm talking about a small, steady climb over 2 years.

But I agree, it's gotta be something like that.
mayna
Nov. 1st, 2002 12:09 pm (UTC)
What about Husbandguy's income? :-)
bride
Nov. 1st, 2002 12:50 pm (UTC)
We're doing the reverse of what you and Bill are doing. You guys put both paycheques into one joint account and then take stuff out of there. Our paycheques go into our own individual accounts. Every month, we contribute to a joint account and we don't touch the money in there (except to shuffle it in and out of investments or whatever).

I was just commenting to W this morning just how "in tandem" we are with our money even without talking about it much. I've been paying for all the groceries (about $100/month), he's been paying for all the lunches (and it works out to about $100/month), so we've decided that we're even. And that's the same with the rest of our joint expenses too, I've been paying for some, he's been paying for some, and it's been approximately even. Where it's not, the person who "owes" will automatically pipe up and offer to pay for the next expense that comes up.
twilight_bill
Nov. 1st, 2002 01:01 pm (UTC)
This sounds more like roomates then family.
I have something similar in the relationship I have withthe two people I rent a house with.... Except I have a spreadsheet to keep track of all the houshold expenses and who paid for what ... to keep us all in ballance.
bride
Nov. 1st, 2002 02:20 pm (UTC)
Re: This sounds more like roomates then family.
It's a similar situation though, it's people sharing expenses. Whatever works is whatever works =)
mayna
Nov. 1st, 2002 01:08 pm (UTC)
Well we do it this way because I make a lot less than Bill does, and then you run into who pays for what, which gets complicated especially when kids roll into the picture. Bill gets $150 spending money a month, I forfeited mine because my schooling is fairly expensive, but I do buy little things here and there out of the joint money. Our savings is separate, in a money market account. We kind of have 1 of his paychecks for our mortgage, the other one generally goes into the money market (unless we have a big purchase), and then my paychecks are for every day expenses. He takes his $150 out of one of his paychecks.
bride
Nov. 1st, 2002 02:27 pm (UTC)
then you run into who pays for what

*shrug* We don't. Never in the 10 years that we've been together have we had any issues with "who pays what".

which gets complicated especially when kids roll into the picture

This is something we'll have to watch for, although I don't think it'll be a problem either.
( 8 comments — Leave a comment )

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bride
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