Have you ever tried to record your personal expense?

If you are going to give me an answer like this:

No, I haven’t…

It’s so troublesome…

I cannot remember where I spend money…

When I am in the mood to record my receipts, I don’t have my home computer, but when I sit by my home computer, I just want to do something else…

Well, very good reasons, and I totally understand and I used to have the same reasons. But, remember, expense tracking is the very first step for starting a healthy personal finance. After many times of failures, I found it is very handy to use Google Spreadsheet and envelops to do my expense tracking and I would like to share the how-to with you.

First and foremost, remember to ask for your receipt whenever you shop, even it was just for a cup of coffee. It can greatly save your time on trying to remember what you spent money on.

Work with the receipt…

On the receipt, I mark the date, the amount I spend. And I will also give it a check ‘X’ on the top margin after I record it.

Here is the key section on how to record the receipts…

I am trying to make things easy for myself by assuming that you already have a Google account and are familiar with Google Spreadsheet. The reason why I choose Google Spreadsheet is that you can access it wherever you are as long as there is internet. If you have questions about how to use Google Docs, simply Google it or send me an email with your questions.

I have a spreadsheet file named ‘2008 Expense’ with 12 Sheets, each named by the month.

Inside each sheet, I have my first row with columns like Where, How much, What for, When and Notes, as the following picture shows.

Although the names of the columns are quite straightforward, I am still going to explain a little about it:

After recording the receipt, I keep them in envelops.

I have a box of envelops of size No 10 just for personal preference and label them with date range.

You may choose something like March 2008 or March 15-25, 2008. It depends on whatever you like and how many receipts you have. Put the receipt with the right time label.

Don’t forget to clean up the very old receipts once and a while unless you have spacious storage. J

Next week, I am going to talk about how to build a healthy budget based on your expense record. See you then.

Credit card cheque is also called visa cheque or convenient cheque. With credit card cheques, you can always have access to your credit card account at times when it may not be convenient to use your card. You can use your credit card cheque up to your unused credit limit. This transaction will be posted to your credit card account as a cash advance and Cash Advance interest rate will be charged from the day the convenience cheque is posted to your account until the balance is paid off.

How much does it cost to use Credit Card Cheque?

Write a credit card cheque will cost you a flat cash advance fee and the cash advance interest even if you pay off your bill in time.

Flat cash advance fee: most companies charge a flat fee of $2.5 for each cash advance transaction.

Cash Advance interest rate: cash advance interest varies; in general, it is around 20%.

Case Study:

Anna uses her credit card cheque to pay the rent ($600) at the beginning of September, since her landlord won’t take credit card and she has no money in the bank, but she will get paid in a week.

Take 20% as cash advance interest and assume that Anna will pay off her bill in time.

She still needs to pay a fee of

600(1.2^ (30/365)-1) + 2.5 = 11.5589059

Anna explains that the late rent penalty is $40. =)