Money Control Sheet
One of the most important actions in managing debt, or any expense for that matter is have control of your finances. Part of this is having a clear and accurate record of where all the money is and where it is going.
The Control Spreadsheet is a useful way of keeping a record of how much money is allocated and tracked for each item. Each item on the plan would be listed in this spreadsheet in the first column. The following columns would be In, Out, Balance, In, Out, Balance and so on through the entire spreadsheet. If a book instead of a computerised spreadsheet is used, all sheets would be cut shorter and with one column less than the first so the first column of listed items can still be read when the sheets are turned.
Each week, the amount allocated for each item is entered into the In Column. Any actual payments (such as rental, gas, phone etc) for that week would be entered in the Out column. The balance column would contain the prior balance plus the In column and minus the Out column. It would also have the date displayed above it. And so a running track record of the finances for each item is kept. A total line along the bottom of the spreadsheet shows the total for each column and can be verified against the bank account statements.
This system will ensure that sufficient monies are available to cover the expenses as well as catching up on the debts. Provided the financial planning is done well and you are not spending more money than you are making. It puts certainty as well as predictability on the lines and does not rely on the memory of individuals to know what is allocated for where. It also enforces discipline on the financial lines as all income and expenditure must be accounted for in the allocation. It clearly makes it harder to use money to cover that extra sudden unexplained bill. Such expenditures should have been allocated for in the original Goals Planning Sheet. If there is insufficient monies set aside to purchase an item wanted then future allocations should be made in the coming weeks to accommodate that desire and this entered on the financial plan. If the overall income is insufficient to warrant the expenditure, it would be time to put one's attention on what can and or should be done to increase the income.
For a business this simple system of controlling your expenditure can be used alongside your required books and would only take, for a small business, about one or two hours at most each week. Fully in use, it will save a considerable amount in lost finance due to unwarranted spending as well as increasing the planning ability of the staff of the business. Most people will consult their bank statement or bank balance in order to ensure that they have sufficient funds to pay for that unexpected bill. With this system you only consult your bank statement or balance to verify it is correct and there are no errors by the bank. You also record on the Control Spreadsheet any bank and government charges.
You use the Control Spreadsheet to see if you have sufficient funds to cover the bill or expense you wish to pay. If there has been sufficient funds allocated then you would pay the bill or expense and record the amount removed in the out column for that week or pay period. Your actual assets are not recorded on these sheets. The purpose of these sheets is simply to give you control of the flow of your money.
A sample control sheet can be found at Money Control Sheet Sample.
This article is an extract from the book' "Kickstart to Wealth".
In all financial activities always ensure you consult with your financial advisors before any decisions are taken
"Kickstart to Wealth"
Publisher: Gold Century Press
Author: Michael Moore
ISBN: 0-9750499-0-9
Price: 9.95 (e-book)
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