Create an Excel template for monthly expenses by using the rows to list and tally expenses and the columns for each month of the year. The document requires two simple steps to create. First, group expenses into three main categories: necessary expenses, discretionary expenses and investment spending. Add up the expenses filed under each category to capture total monthly expenditure.Continue Reading
Necessary expenses include items that are unavoidable or indispensable, such as taxes that are exacted onto your payroll and property, rent and mortgage expenses, as well as loans that must be paid back periodically. Another critical expense that falls under necessary expenses is insurance coverage, such as health insurance, life, motor insurance and home or renters insurance. Other common necessary expenses include home supplies, laundry and dry cleaning costs, and water, gas and electricity bills.
Discretionary expenses are costs that are not as urgent or important as necessary expenses but improve the quality of your life nonetheless. These expenses include cable TV, credit card bills, Internet access, vacation and entertainment costs.
Investment spending is any expense that cuts into your income but contributes to an investment in the future that is of high importance, though not immediately urgent. Examples of investment spending include 401k deposits, employee stock plans and IRA deposits.
It is important to classify your expenses into these three groups to help prioritize on expenses that must be sorted out first.|Learn more about Software