Dug this Full Story
up this morning while working on my 2021 budget numbers. Reconciling
the end-of-year numbers (cash on hand vs remaining liabilities) is always a nightmare. But after doing all the number crunching, I’m ending 2020 with a $6 (six-dollar) surplus. Yikes! Pretty darn lucky. It’s usually off by more.
25 or more years ago I learned how to budget-out for a year in advance. Began keeping written records on 8 X 11” sheets of loose-leaf paper and have been true to the methodology. A cover-page tabulates the year’s projected income
from various sources along with the year’s budgeted expenses.
. These need to balance. Much is on auto-pilot. But about a dozen separate pages are used for tracking the major anticipated outlays (travel, home repair, new computers, etc.). A contingency fund
is also built-in for unanticipated expenses. Without getting too specific, the approach builds in a generous sum of “pocket money” every month so that there’s no need to record smaller purchases like motor fuel, groceries, incidentals.
A written approach like this has to be considered a dianosaur by today’s standards. But “If it ain’t broke, don’t fix it”. Curious what approaches others use (including the “Hail Mary” plan) in budgeting expenses?