Budget

I know I've been focusing on my food issues in recent posts, but I was working on my budget today, and decided it was so cool I wanted to share it. Please forgive me for bragging a little bit, but I'm pretty proud of myself for actually using some of the things I've learned in my classes this year in real life.

I use Microsoft Access to track my budget. I learned how to use Access mostly during my Accounting Information System's class last semester. For those of you who don't know, Access is a database program that allows you to collect a lot of information in one place, and then display it in as many different formats as you can think of. You start out by creating tables for the information you plan on using/collecting about each event that you want to track. I have three tables in my Budget Database.

Bank Account Table

This table is where I keep a list of my bank accounts, I included a cash account because I want to keep track of how much cash I have as well. The Transfer Account has a special purpose that I will describe more later.

Envelopes Table

Have you ever heard of the envelope system? It's a fairly popular budget strategy. Some people use physical envelopes and cash, and there is at least one online service that helps people track their money this way. I really like the envelope system, so I designed my budget to follow it. The way it works, is that you have a number of envelopes or categories that you will spend money on. I decided to try to keep the number of envelopes down to simplify things. (As you can see I haven't set a Budgeted Amount for each envelope yet, but that's coming soon.)Then any money you get goes into one of those envelopes. Whenever you spend money it has to come out of one of those envelopes, and once all the money is gone you can't spend any more  from that envelope unless you borrow from another envelope.

Transaction Register Table

My third table works kind of like a checkbook register. This is the only table that gets added to on a regular basis. Every time I have a new transaction it goes into this table. This table records all available information about each transaction including the date, the bank account the money came out of or went into, the envelope the money came out of or went into, the amount of the transaction, and a description of the transaction.

Now, part of the point of Access is that you can use the database without having to interact with these tables all the time. In order to do this you create forms that allow you to edit the tables without actually opening the tables. I only have one form on my budget, and that is the New Transaction Form.

New Transaction Form

This form allows me to easily fill out all of the information that the Transaction Register table asks for in one location. This is also where I go to edit a transaction if I made a mistake when entering it.

All of this is great, but so far there's no way to see how much money I have in my bank account at any given time or any way to see how much money I have left in each envelope. In order to display this I use a feature called Reports. (These are based on Queries, but it would take a lot of explaining to tell how those work, and most people would be bored. If you want to know more specifically how they work leave me a comment with your email and I'll tell you about it.) I have two reports.

Account Summary Report

The Account Summary Report shows me how much money I have in each account at any given time. (Once again, I'll explain more about the Transfer Account later.)

Envelope Summary Report

The Envelope Summary Report shows me every transaction, and which envelope it affected, as well as the total amount in each envelope at any given time.

The way my budget currently works is really quite simple. Any money I spend comes out of the appropriate envelope. (all of them except Income are used for this purpose.) Any money I receive goes into the Income envelope. Then at some point (right now it's random, but eventually it will be once a month) I divide it up between the envelopes and transfer the money into the different envelopes. This is where the Transfer Account comes in. In order to transfer money between envelopes, I have to make one entry/transaction that takes the money out of one envelope, and another entry/transaction to put the money into the other envelope. In order to make sure I don't miss any transactions or put a different amount on complimentary transactions I use the transfer account. This account should always have a zero balance, and if it doesn't then I know I did something wrong.

And that's the way it's done.