TUTORIAL

INTRODUCTION

Financial problems occur when you spend more than you earn.

The usual problem is not that people spend without concern, but that they spend the money before they earn it.

This problem is compounded by the fact that most people don't know how much they really can spend without getting in trouble.

All expenses may be categorized into two groups:

  - Fixed, non-discretionary, such as the rent, and

  - Variable, discretionary, such as food, clothing and entertainment.

Obviously, money must be set aside for the non-discretionary expenditures before considering the discretionary expenditures, or you are in trouble. (You may not like to think of food as discretionary, but you usually really do have the option to eat less expensively rather than not pay the rent!)

This problem is further compounded by the fact that most people's pay periods do not coincide with all of their expense periods.

Examples might be:

  - Pay period is weekly

  - Grocery shopping done weekly

  - Rent due monthly (4.33 weeks)

Before the electronic age, and the age of charge cards, your grand parents solved these problems by your grandmother taking your granddad's pay envelope and putting the money from it into several jars, one labeled rent, one food, one clothing, etc.

This was merely a simple budgeting system, and a way to make sure that there was enough money to pay the rent when it came due and to know how much she/he could afford to spend on any specific topic.

This program is designed to help you avoid financial trouble by creating a simple budget system and then allowing you to do the computer "electronic" equivalent of putting your money into your various budget "jars" or categories.  Of course, in your case you will keep your money in the bank where it will be safer, and maybe even earn a little interest.
 

PROCEDURES

Money Available

This program assumes that you have one or more bank accounts into which you deposit money and from which you withdraw money (write checks) to pay expenses.

You also will likely have credit card account(s), may have a savings account, and may have other accounts for retirement, Christmas fund, etc.

To keep it simple, this program does not separately add up all of your various assets, and debits.

Rather, you should decide which assets and debits are to be a part of your budget system.

Examples:

 - Do include:

     Checking account(s)
     Christmas account (treat as expense from each deposit)
     Credit card account(s)

 - Do not include items you do not want to spend, ie:

     Savings account
     Retirement account

When considering what to include, remember that you will be creating a budget for your expendible income.  Therefore, if retirement is automatically deducted from your pay, you will not include it in your deposits and will not include it in your budget.

Further, if savings are automatically deducted from your pay you will not be depositing that money and should not include it in your budget.

However, if you separately (or automatically) transfer money from your checking account to a savings account, you should budget for this amount and enter it as an expense each time that the transfer occurs.

NOTE: To avoid frequent use of your savings for unexpected expenses, it is good practice to have a small Miscellaneous category to cover such items.

References: See the following pull down topics under Program Instructions for specific guidance:

 - Money Available - determining your money available
 - Categories - setting up budget cagegories
 - Budgets - setting budgets for each budget category
 - Deposits - distributing deposits to budget categories
 - Expenses - distributing expenses to budget categories
 - Adjustments - adjusting category balances as needed

END