6/18/2018

Simple Bookkeeping Tips For Growing Families


Keeping track of money can be either a total pain or a real stress-buster. Putting it into the stress-busting category is easy when you get the hang of a couple of simple bookkeeping methods, and you can look forward to finally being in control of money, instead of the other way round.


Set up a Really Simple System
In fact, so simple all you need is a notebook and pen. Divide the page you’re working on into four columns. Starting from the left, head the columns with Date, Item, Cost, and Balance. Under Balance, put your current bank balance. You’ll deduct the amount of each purchase from this running total so you always know how much money is left. In the other columns, write down what you bought, what it cost and the date under their respective headings. The only other thing to remember is to subtract direct debits or standing orders etc. from the balance total otherwise it’s misleading and can lead to overspending. It’s just as simple to set up a similar system in Excel, with the added advantage that you can program it to do the arithmetic for you. Use a new notebook page for each month (or week if you have lots of transactions). In Excel, either set up new worksheets for each month (carrying the bank balance at the end of one month forward to the next) or just leave a few lines blank and continue your records down the same page.

Take Control of Receipts
Because you’re going to record every purchase no matter how small, you probably won’t want to be opening a notebook every few minutes on a shopping trip. Save the receipts until you get home and have a minute spare, then go through them all at once and enter the figures into your bookkeeping systemUnless you need the paper receipt for warranty reasons, throw it away when you’ve transferred the details. A bookkeeping bonus is that you won’t have dozens of old receipts hanging around in the bottom of your bag.

Analyse the Numbers
Once you have a couple of months’ worth of records, you can start identifying your household spending patterns. Look for those items that recur often, or choose a category of spending (such as childcare or grocery shopping) and tot up how much those things are costing each month. Once you have a figure in your mind for what certain things are costing, you can make informed decisions about whether to carry on or do things differently. It’s a far better way of deciding where to cut down, rather than randomly cutting out a few nice (but not strictly vital) treats.

When DIY Bookkeeping Falls Short
Sometimes doing the accounts yourself when you’re not actually a trained bookkeeper can be trickier than simply tracking income and expense. Some of those times might be:

* You’re running a business alongside a regular job. 
* You have savings and investments to track.
* You’re self-employed.
* You submit a tax return.

Running a business from home, for instance, usually means you can claim part of your household bills against tax. If you submit a tax return as well as paying tax through employee PAYE, you could end up paying too much. In those instances, professional accountants or bookkeepers can help you keep things straight, reduce your tax bill, and keep your financial affairs legal.

And a final tip, teach this simple bookkeeping method to older children. Mostly they’ll find it fun to have their own accounts, and you’ll be giving them a valuable life skill that will help them manage money through adulthood.

- This is a sponsored guest post.

2 comments:

  1. Seems practical and sensible to keep housekeeping accounts, etc. I think a lot of us are unlikely to do so. Yet, surely we need to prioritise our financial responsibilities. Keeping records as you mention would make it clear where and when finance was out going. Allowing us to see how changes could be made, causing the least negative impact on the family.

    Rachel Craig

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  2. Wondering about the Pros and Cons of running a business from home. As may be a way of addressing family and household commitments along with accessing an income.

    Rachel Craig

    ReplyDelete