In Charles Dickens’s novel David Copperfield, a
character speaks perhaps the greatest truth ever uttered about
personal finances: “Annual income twenty pounds, annual expenditure
nineteen six, result happiness. Annual income twenty pounds, annual
expenditure twenty pound aught and six, result misery.”
To make sure you end up on the happiness side of the equation,
you need to manage your annual budget properly. It’s tough to get a
handle on your annual finances–but this excellent, free Excel
spreadsheet helps. Family Budget Planner for Excel lists every
category of income and expense you can imagine. All you need to do
is fill in your estimates for the coming year, and you’ll see
whether the likely result is happiness or misery. If the answer is
misery, adjust your estimates until the numbers add up right–and
then, of course, follow through on your budget.
There’s one shortcoming in this spreadsheet that you need to
keep in mind–it has no area for your taxes. So when you fill in
your income, only input your net income (including interest income
and dividends), not your gross.
Note: This link takes you to the vendor’s site, where you
can download the latest version of the software.