I was reading an old thread on the forums started by someone who said when they look at their checking account, all they can see is how much money they have and think of it as money they can spend, not as money that's allocated for other stuff.
I used to have this problem waaay back in the day. I think that's why the system that has worked best for my budgeting is my "future checkbook" spreadsheet. Instead of entering bills as they come and seeing what my current balance is, I start with my current balance and calculate all my future income and expenses a month or two out. On each line item, I have a column that shows what would happen to my checking account balance with each transaction. I even have that column programmed to turn red if a number is negative.
It's really helpful to see if there are any dates in the upcoming months where the checking account balance could dip dangerously low. Usually it never dips below several thousand, but since big expenses come up occasionally, it helps.
Once an expense is paid or income comes in, I update the current checking account balance and delete that line from the future budget. I don't really track things that have already happened; I'm really only interested in what's going to happen in the future and whether I have enough money to fund everything I want and need to. When there's only a few weeks left in the future tracking, I add another month to the bottom of the spreadsheet.
I make sure the bottom of the spreadsheet always balances out to zero, even though my checking account balance never gets to zero. Basically if there's any surplus in the upcoming budget, I add that as an expense line item so if I spend more than predicted in my future checkbook, I have to take it out of my surplus.
Anyway, knowing where every cent is going in the future helps me not see my checking account balance as available. Obviously it's a commonsense notion, but I like having the concrete proof of that.
I haven't seen anyone else use a system like this, but I taught one of my friends how and now she uses it religiously. It hasn't solved all of her problems but it does keep her from overdrawing her checking account, so at least she doesn't get hit with NSF charges anymore.
Does anyone else track future checking account balance?
May 9th, 2016 at 05:45 pm
May 9th, 2016 at 07:00 pm 1462820431
May 9th, 2016 at 07:50 pm 1462823436
Right now I only have May in Quicken, but sometime in the next 2 weeks I will put in all of our June income and expenses. (I usually do this 1-2 weekends before the month is over). I won't know all of the numbers, but I will have an idea and it's real easy to change as numbers become more concrete. It starts as a "projection" and then gets more concrete as the month passes.
May 9th, 2016 at 10:07 pm 1462831673
May 10th, 2016 at 06:45 pm 1462905924
May 10th, 2016 at 06:57 pm 1462906622
May 14th, 2016 at 01:15 am 1463188536