Budgeting: The Hybrid Method
By: Jennifer Taylor Chan
Tags: Finance, Personal Finance, Minimalism, Personal Development, Self Improvement

I’ve written extensively about how I use the Bullet Journal to track my spending, as well as the different types of minimalist budgets that I’ve experimented with. Generally, I prefer analog tools over digital ones. Applications are made by other people who have different preferences when it comes to inputting, analyzing, and reading data, and there’s a slim chance that our preferences are aligned. With a pen, ruler, and notebook, you can design a system that works for you.

Recently, however, I came across comprehensive budgets that were made with Microsoft Excel — replete with colourful graphs and formulas that auto-populated cells that updated the aforementioned graphs. This led to a desire to learn more about Microsoft Excel’s capabilities and teaching myself how to properly use formulas, work across spreadsheets, and other basic tricks of the program.

My current financial operating system now incorporates both a digital and analog component. It is not necessarily more complicated but it is more sophisticated.

First, at the beginning of the month, I open Microsoft Excel. On the first sheet I plug in my budget goals for each spending category. For example, I hope to spend less than $100.00 on subscriptions and $150.00 on entertainment. When I enter these numbers, the graph on the right side of the sheet automatically inputs those numbers.

This is the template I use. The numbers are fictitious.

The next step then is the same as before: painstakingly track each expense in my notebook. I still use a Leuchtturm1917 notebook but I have also used a Moleskin before too. In the notebook, I create a simple chart using a pen and ruler, which requires that I insert the following data:

Date of expense

Item purchased

Category to which that expense belongs

Cost of the expense

Method of payment

Remaining amount in that category.

At the end of each week, I re-open the Excel spreadsheet and input the total amount spent in each category on a second sheet. The totals of each category then auto-populates on the first sheet, in the column beside the budget goals, as well as updates the chart. So, for ease of reference, I can simply glance at the graph at any time to see whether I need to slow down my spending or have room to indulge. There is also a third column, beside where it auto-populates my actual spending, that screams whether I’m presently under budget or over budget.

The totals of each category are auto-populated on the first sheet in the column beside my budget goals and in the graph.

Why not record my spending in Microsoft Excel, you ask? Because I don’t want to spend more of my time on my iPad or laptop. My notebook comes with me almost everywhere so it’s extremely convenient to jot down my expenses. I also rely on friction to curb my spending — the act of having to record all of my purchases in detail is annoying enough to make me rethink taking out my wallet.

This hybrid method of budgeting allows me to customize every aspect of my financial system while retaining the benefits inherent in both using a sophisticated digital tool, Microsoft Excel, and a good ol’ fashioned plain notebook. The mistake most of us make is that sacrificing complexity means sacrificing sophistication. I think this method of budgeting proves the contrary.