The Grandparents’ Blog

Budgeting can be a lot easier using spread sheet tools and they don’t have to be complicated to be useful. I have used Microsoft Excel © spreadsheets for cash forecasting and budgeting in my business life for the past fifteen years and before that, spread sheets from  Lotus 123 and earlier packages.  I have found spread sheets invaluable in planning my own cash flows and managing my retirement income and expenditures. I have developed a set of comprehensive sheets which integrate my Microsoft Money© results with my anticipated cash flows. I would like to share a simpler version with you to use and adjust to meet your own needs.

The attached XLS spreadsheet covers 2008 and 2009 but can be easily expanded to cover any period ahead.  I have my own formulae for populating the worksheet cells. Some are based on fixed monthly payments so I can enter one value and the sheet fills the row with the same value. Alternatively I can drag and paste values across the months.  A third way method I use takes the same value for same month last year and  inflates the value to cover inflation. Finally, one off amounts can be entered where appropriate, in the same way quarterly payments, such as the NTVLO debits can also be copied across.

I toyed with the idea of ignoring inflation (in both income and expenditure terms) but we all face a mixed bag of both fixed flows and inflationary flows so a better result is obtained by attempting to predict likely inflation rates and their impact. I select a rate related to the base rate less 3%. You can the apply an increase in a specific month and carry the new amount forward using the “=” function or dragging and pasting. The example sheets list the expense categories in the order that they are imported from MS Money.  Obviously, you can alter or add to these to suit your needs.  Be sure to correctly insert the items that can be positive or negative. I have used positive for an inflow and negative to denote an outflow. Live with this or change to  your preference but remember your choice.

The 2009 worksheet carries forward the previous December values so you will need to edit these where carry forwards are not appropriate.  For these demo worksheets, I have worked out interest on a simple annual rate divided by 12.  You may wish to adopt a once a year value based on a particular balance or average depending on your banking arrangements. This works equally well for both savings and borrowing. I have worksheets out for ten years, all interlinked.  This span covers two five year pension reviews to age seventy five which is a critical pension milestone as I am sure you are aware. I also link these worksheets to my tax calculations for my annual return.  It is also handy to add work sheets to analyse utility bill trends - phone, oil, gas, petrol … although I find MS Money’s expense analysis reports  very useful now that I have four years of transactions saved in the Money database.

Most pensions are paid monthly or annually.  However, UK State pension is usually paid on a four weekly basis.  The actual payment cycle varies with the individual, so select the month when two payments come in.  The main benefit  of using and maintaining a budget is that you will improve your ability to balance you longer term cash flows to meet your special needs such as holiday plans, car purchases, house improvement and repairs - in other words the important things that need careful funding.  If you are like us and try to take those last minute special holiday offers, it essential to know that your cash flow can support your plans.

I will continue to tinker with the sheets over time but I can only undertake to customize them to an individual’s specific needs for a pre-agreed fee. I am pleased to work on that basis, however anyone with Excel experience can easily develop these sheets further.

The attached worksheet is password protected - the current password is “password”.  change it using File>Save As>Tools>General Options.  Save that password in your Alzheimer’s worksheet! (See previous blog!)

I would welcome comments from anyone interested, and I hope the sample sheets are helpful.