Sometimes on my ride home from work on my bike I think about the strangest things. Over the past several weeks, one of the strange things that I have been thinking about has been the probability of hitting every street light on my trip home while the light is green. There are 28 intersections with street lights that I have to cross on my journey home, two of which are left hand turns. I am convinced that if it were not for these lights I would be able to get home in 30 minutes instead of my typical 45-50.
Unfortunately, I don’t think that this will ever happen. When I ran the numbers I calculated that my chances of getting every green light on my way home would be 1 in 268,435,456, which is (1/2)^28. According to Wikipedia, the chances of my winning the Mega Millions is much, much better (Mega Millions chances are 1 in 175,711,536). So if I ever get home on my bike without hitting a red light, I going straight to 7-11 and buying me some lotto tickets!
But seriously, how alive would you feel knowing that you just accomplished something that only happens 1 in two hundred and sixty-eight million, four hundred and thirty-five thousand, four hundred and fifty-six times? I think I would feel like I was walking on sunshine.
I just wanted to announce a couple of new happenings here in My Family’s Money land. I have been working pretty diligently on a new portion of the site – a personal finance quotes section. So far I have 35 different quotes up from sources as diverse as Fight Club and the Koran. Please feel free to head on over there and check it out. I plan on getting an interesting quote or two up every day during the week so if you are into that sort of thing you might want to consider subscribing to the RSS feed.
Also, I have been hard at work on a series that I am labeling Budgeting Basics. I have already written the intro post at Budgeting Basics: Budgets Matter and I have about 5-10 more posts in the works, several of which I am working on figuring out video instructions for. I’ll definitely need some feedback on these videos since I have a feeling that my first attempts will have some kinks that some constructive criticism will work out in the end.
In fact, if you could head on over to Budgeting Basics: Income Tracker and check out the video I would greatly appreciate it. Let me know what you think about it in the comments section or fill out the contact form on my about page if you don’t want to make fun of me in front of everybody on the internet . I will greatly appreciate any feedback you are willing to give.
On social networking news, I have joined the ranks of twitter. You can join me at http://twitter.com/MyFamilysMoney and become my follower.
As I mentioned in my post about how budgets matter, the best budgets both increase income and decrease spending. It is this dual characteristics of budgets that really makes them useful as a financial tool for moving a family toward financial independence and a greater impact on the world. But if budgeting focuses on both income and expenses, where should I start in creating my budget? I think for the sake of this series we are going to take a look at the income side of budgeting before we look at the expenses side – but when I first created my budget spreadsheets I did it in exactly the opposite fashion.
I think the real issue is making sure that you have the double focus when you work on and implement your budget because both really, really matter to your long term financial situation.
Where Does My Money Come From?
This is the first question that you need to ask yourself when beginning to get your financial house in order. Luckily, this is generally a very easy question for us to answer. Most people know exactly how often they get paid – biweekly, semimonthly, monthly, or on a irregular basis – and probably also know how much they are going to get paid – unless they have variable hours, worked a lot of overtime, or just received a raise.
This predictability is very good for you and your family. It all boils down to the fundamental personal finance equation I talked about in Budgeting Basics: Budgets Matter -
Predictability in the Money Earned variable in this equation means that by manipulating the Money Spent variable you can increase the sum of the equation. A quick example – if I know that I make $100 a month, I know that I have to keep my spending under $100 if I am going to be able to save or give any money away. Without this relative consistency, I can become uncertain about the future and miss out on opportunities to save or give. Knowing my income helps give me a framework within which to create spending, saving, and giving goals that are meaningful and actionable.
After all, it is really hard to see where your money is going to go if you don’t know anything about how much money you have.
How To Create An Income Tracking Spreadsheet
I recommend watching the video in HD
In the video I explain all the steps that I have outlined below. If you like to see examples, watch the video. If you just want the gist, read my outline.
Open your spreadsheet application of choice. For most this means Microsoft Excel – but for those cheapskates out there (like me) you can get free productivity software that includes a spreadsheet editor from Open Office or Lotus Symphony. I use Open Office but am interested in checking Lotus out.
Title your sheet “Income”. In Excel you do this by double clicking on the sheet tab on the bottom of the window. In Open Office you need to right click on the sheet tab.
Create a title for the table you are about to create. I like to give my tables some space from the top of the spreadsheet. Enter your title in B4. Bold the title and make it a larger font so that it stands out. I like size 14 font.
Give your table some meaningful headings. I like to use the following headers for my columns. These aren’t necessary, but I find them useful:
Date – This is the date that the funds were handed over to your family
Source – Who did the handing over of the funds
Amount – The amount of money that was handed over to your family
Who Earned It – Who in your family earned the money
Type – If you only have one source of income, this really isn’t that important. But if you want to track things like interest income, second job income, internet income, dividends, rental income, etc than this column could be a source of some pretty useful information.
You really only need as many columns as the information that you want to track. In my family’s case, I wanted to see the breakdown between my wife’s and my income because we had a goal to be saving the entire sum of her paycheck when she was working. You could have two columns or you could have fifty. Do what feels best for you.
I would do these on Row 5 starting in Column B.
Add some borders to give your eyes focus. Borders are not necessary, but they do provide some structure to the page and help give your eyes boundaries to look at. They also help provide a termination point for your table, which is important for step 6 found below. I like to have a border box around the whole table, the table title, and each column heading (date, source, amount, who earned, type, etc.). Then I like to have a border separating each column in the table from the other columns. Add borders as you see fit.
Create a Total cell at the bottom of your table. At the bottom of your Amount column (if you are following my pattern this will be in somewhere in column D) enter a SUM function. You can do this by:
Selecting the cell that you want the sum to appear in
Type =sum(
Highlighting with your mouse all the cells in the Amount column
Typing )
Hit the ‘enter’ key
Then in the cell just to the right of the sum type the words Total. You can bold this text if you want.
When all is said and done, you should have a spreadsheet that looks something like this:
There are plenty of things that you could do to add a custom feel to your income tracking spreadsheet. My wife would probably change the font to something “pretty” and might spruce up the screen is some splashes of color. I prefer the Spartan feel of blank cells and white space on my budgeting spreadsheets, at least on the simple ones like this. Feel free to modify as you see fit.
If you send me a picture or a copy of the file I’ll be sure to post the picture here for others to see. Budget on!
On Friday, January 23 I was informed by my bank that my online savings account had been compromised. Apparently, on January 20 there were log ins from two different locations and this triggered a fraud protection mechanism that my bank has in place to ensure that my money is secure and baddies cannot get access to my funds.
I, however, was not aware of this when at around 9 AM I attempted to log in to my account only to be accosted by the following ambiguous announcement:
Unable to verify identity
Being at work, I was forced to wait until noon to call the customer service number to figure out what the heck was going on. During the call I was asked 50 million verification questions (some of which I couldn’t answer! – like the name of my employer listed on the account). Having to answer so many questions did make me feel at ease – I pretty much know for a fact that since I couldn’t even answer some of them somebody who wasn’t me had no chance of answering them.
After the fraud representative was sufficiently satisfied with the fact that I was the actual owner of the account, she filled me in on the two log in issue that froze my account. I do sometimes log in at work and at home (even on the same day) so this was my initial thought about what might have happened. The rep seemed shocked that I couldn’t remember for certain if this was the case. “It was only a few days ago,” she said. Here incredulity cut through the receiver like a dagger aimed at my masculinity. Luckily, I don’t care that I don’t remember stuff like and the blade bounced safely into oblivion.
To try and rattle my memory she asked me who my internet providers where at the locations that I normally log in at. “Umm,” I searched frantically in my mind for knowledge I didn’t have. “I couldn’t tell you who my internet provider at work is.” My calmness and composure seemed to annoy the rep like honey on the face of a hiker buried up to his neck in sand, an ant hill just a few feet away. She was well trained, firing back by asking the same question a dozen times with only slight variation in an equally calm and professional tone.
After we danced back and forth for 5 minutes about how I was brain dead for not being able to remember what happened on Tuesday I put an end to the Spanish Inquisition, which I didn’t expect (but who does) and for which I was grateful for. “So let’s say that my account was compromised, what do I do?”
She outlined several steps that can be summed up as the following: go to your local branch, they will sort this out for you. I obeyed and went into my banks brick and mortar establishment. There, through my ability to look at computer screens and read information, came to understand that the bank had also locked all debits to my accounts made electronically. Words in all CAPS are easy to read from 4 feet. This also made me feel safe – my money was in good hands.
The nice man behind the desk opened a new account for me, kept enough cash in my old accounts to handle an outstanding check, and was generally friendly and amenable. Within 20 minutes the vast majority of my cash was in a new, uncompromised checking account.
My Online Banking Takeaway
It is very useful that a bank puts a serious kibosh on fund transfers once they think an account has been compromised. I think this is fantastic and it makes me feel like my money is safe.
Remembering things about your life is harder than I thought, especially when I don’t really think too much about odd details.
It is totally time to get a new online savings account. My banks rates were already pretty crappy (1.5% APY) and now that I don’t have the account anymore I need to find another place for ~$28,000 in cash.
I am completely impervious and highly in tune to the veiled barbs of customer service reps. This skill has to be useful in some type of money making sort of way. Maybe I could become some sort of consultant or something.
~o0o~
I wrote a few notes on Twitter documenting my experience.
Life is all about maximizing happiness. My Family's Money is about exploring how money fits in to making the world a happier place through humor, financial transparency, wartime living, and looking at life's major events through the money lens. There is so much more to life than money, so it’s high time we made money work for us so we can really get down to living instead of working.
. I will greatly appreciate any feedback you are willing to give.