“How much do I have left to spend?”
This is a common question, especially when it comes to discretionary spending like dining out at restaurants or movie nights with the kids.
That’s why we made a new Spending Money sheet.
The Spending Money sheet aims to simplify budgeting. It helps you understand exactly how much discretionary money you have to spend without dipping into funds for fixed or obligatory expenses like rent and utilities.
You only add in the things you know you’ll have to pay for or want to have a cap on to make sure the money is set aside and available for those items.
Many folks who used the Level Money app will find this budgeting style familiar. We like it because it puts less pressure on new (or seasoned) budgeters to set and rigidly stick to a target.
Obligatory money is set aside, and there’s flexibility throughout the month about where the rest of your money goes.
How to install the Spending Money Sheet
Use the Tiller Labs add-on for Google Sheets to install the Spending Money sheet.
Which categories should I include?
The first step is deciding which categories to include. Before you decide it’s important to understand how the calculation works.
How much available spending money you have = actual income (from all categories except ones you make estimates for ) – actual expenses (from all categories except ones you make estimates for) +/- the estimates for your estimated categories.
Essentially, the calculation factors in actuals from your Transactions sheet for any income or expense category that’s not included in the list in column A on the Spending Money sheet as well as estimates for Categories you do include on the Spending Money sheet.
Categories you should include on the Spending Money sheet category list are any that are fixed every month, like a mortgage payment, your cell phone bill, health insurance, a car payment and a regular fixed income, like a salary, if you have one.
If your income isn’t fixed each month, just add an estimate for what you expect to earn, but you may need to adjust the estimate throughout the month to keep the estimated spending money amount most accurate.
How to Track Flexible Spending
You can also include other categories that aren’t fixed if you want to be sure to set aside a certain budgeted amount for them and to ensure that the money for those doesn’t get factored into your discretionary spending money total.
For example, if you want to make sure you have $300 for groceries available you can include that as a category with an estimate on the Spending Money sheet.
Since you’ve set money aside for that on the sheet you don’t need to reference the “estimated available spending money” amount on line 7 to decide how much you can spend when you’re at the grocery store.
But if “entertainment” isn’t on that list you would reference this amount when you’re at Best Buy deciding if you should purchase that new DVD for your collection.
So it’s really up to you as to how you want to use it and budget your money.
It’s useful when you’re at the grocery store too because you can see how much you’ve actually spent vs your estimate, and make a quick call on how much is left to spend on groceries.
The keys to making sure your estimated spending money figure is accurate are categorizing transactions and adjusting your estimates throughout the month for things that aren’t fixed if that’s how you decide to use it.
If you spend more than you estimated on groceries for the month already, update the estimate for that category to make sure you don’t overspend in your discretionary categories.
Set Up Your Spending Money Tracker
So now that you’ve thought through which categories to use you can follow these steps to complete your setup.
- Use the dropdown menu to add income and expense categories to your list in Column A starting on row 10. Don’t include Transfer categories, these are ignored.
- Enter estimates in the Estimate column for all categories. All estimates should be entered as positive amounts – even expense categories*
- Categorize transactions on the Transactions sheet.
- Choose your time interval (daily, weekly, monthly) in cell A7.
- Review your spending money estimate and summary at the top.
*The calculations understand whether it’s an income or expense category based on the “Type” set in the Categories sheet.
Understanding the Spending Money Summary
Once you’ve entered in all the Categories for which you need or want a budget target you get some insights at the top.
Estimated Cash Flow
The sheet calculates your estimated cash flow (income – expenses) based on your estimated values. Keep in mind the cash flow estimate doesn’t factor in your actual spending so this is also an indication of how much money you’ll have left over to spend based on your estimated income and fixed/tracked expenses.
Discretionary Spending So Far
This is the total amount of spending for categories that do not have estimates in the Spending Money sheet based on actuals from your Transactions sheet. If this value is less than your estimated cash flow amount above it, you’re doing great. To stay on track and within your estimates, make sure this value is always lower than the estimated cash flow.
This is the sum of the amounts for transactions that are not categories on your Transactions sheet. Be sure to categorize your transactions to keep your estimated spending money total accurate.
Estimated available spending money
You can use the dropdown menu to change the time interval to give you a daily, weekly, or monthly estimate of your available spending money for the current calendar month.
This estimate is most accurate when you’ve categorized all your transactions and you’ve updated estimates for categories that are not fixed amounts each month. It will also change throughout the month.
The amount you see here at the beginning of the month will be different than the amount you see here at the end of the month as your actual spending gets factored in.