EVERIES REMINDER 26, looking at money (Part 2)

​If you’ve been Counting since Looking at Money (Part 1), you will have now recorded a month of spending – and earning – to look at. During this month you will have engaged in most categories of everyday spending. You’ll be able to see where your money goes and turn the exercise into a planning tool (Part 3) instead of purely recording.
Do the following steps to prepare you for Part 3 (then continue Counting for a few days to make sure it all looks right).

1. Read down your category list, looking for any expenses that don’t quite fit. Let’s say you put ‘Dining out’ for both a takeaway meal and a date.
   1. Strictly speaking, neither of these are ‘dining out’ in intent. One reflects ‘not preparing my own food’, while the other is about ‘looking for a partner’. Going out with friends to try a new restaurant would be a more proper example of ‘dining out’ when we’re talking about why you spent the money on it.
2. Therefore, adjust any of the categories you’ve assigned so that what you were trying to do or achieve at the time is more accurately listed.
3. Next, cover any annual or quarterly allocations for bills.
   1. List them in the back of your Counting book in pencil (so you can always add to or change items in this ‘Annuals’ list and recalculate).
   2. Write the annual amounts in the column next to your listed items.
      If you’re not sure of the cost this year, base it on past years and round it up generously. For example, if an annual upgrade or membership was $75 last year, put $100. This will help cover unforeseen expenses, too.
   3. Add all those together to get the total annual sum.
      ​(Horrifying, isn't it?)
   4. Write it at the bottom of the column.
   5. Then divide the total amount by 12 to get the monthly amount you would ideally set aside to cover each of these big bills when they come in.
      Say $2400 ÷ 12 = $200.
   6. Put that figure in this month’s Counting, categorised as “Big-Bills”.

Likewise, if you had one of those big bills this month, divide that up appropriately so that the amount in the $ column of your Counting book only reflects what the monthly allocation would have been.
Make sure you are including all this month’s income: tips, commissions, side-business drawings, the lot.

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​If you had an unexpected windfall, I’ll have to let you work out how to apply that to one month, depending on the amount and cause of the windfall.

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If in doubt: Underestimate Income, Overestimate Outgo.
If there are any surprises later, you'll want them to be pleasant!