A few years ago I did something that iMpRoVed our financial stress. In addition to tracking our monthly expenses, I made a simple spreadsheet that estimates what our bank account will look like in six months.
Whenever I log our monthly expenses, I also update this 6-month sheet (to see an example, click 6-Month Spreadsheet). At the top, I enter our most current bank account total. Below, I have the pRojEcTed expenses and income for each month. You should have a pretty good idea on how much you spend if you already keep track of your monthly expenses. If not, now would be a good time to start! If your income varies due to sales or farming, etc. you need to enter in a realistic number to ensure your 6-month projection is as accurate as possible and doesn’t give you false hope.
One reason this concept comes in handy is because it anticipates yearly bills. Propane refills are already estimated in the months of October and January, so when the time comes there is no big SuRpriSeS. By taking into account all of your known expenses you won’t have to worry (and stress!) about moving money around to accommodate.
I especially like the 6-month forecast when I want to make larger purchases. If you’re itching to buy new carpet, you enter in the total and instantly have a good I D E A how much it will affect your finances in the long term. For example, you may get a bonus at work and see an immediate increase in your bank account. You go out and spend it all (and maybe a little more), and then two months later you are panicked because you forgot your vehicle tags and taxes were due. See how this could have been avoided?
As far as financial surprises, like if our car breaks down, I don’t estimate for that. You will find that if you do the 6-month spreadsheet you won’t be likely to spread your bank account too thin. Pick a number that will give you a nice CusHioN for emergencies. As long as you stay above your goal you can avoid roller coaster financial stress and feel more confident in the purchases that you make!