Accounting for my expenses trial – Day 1

For 30 days, I’ve decided to watch and account for all my expenses.

For this trial, I thought that I would profit from that MBA Accounting class, and use some of the techniques learned in that class, adapted to my own needs.

I created an Excel sheet, and I named the first tab “Accounts”. There, I created a page with T-accounts for all my bank accounts (i lived in UK and France, so I have several accounts here and there). I also created a T-account for “Cash”. This was made with the advice of a friend. T-accounts allow you to use Debits and Credits. On these accounts, anything coming into it is on the Debit side, and anything coming out of it is on the Credit side.

For those who do not understand this, a T-account basically have two columns: the left one is called the Debit side and the right one is called the Credit one. To simplify the explaination, imagine that I have only one Checking bank account. I create another account for cash, here is what it looks like on Excel:


Now, let’s imagine that I go to the cashpoint, and take out 20 € from my checking account in cash. According to what I said earlier, I would enter this:


Now, I create a new account that is called “Expenses and Revenues”. I put Expenses on the Debit side and Revenues on the Credit side. So now I have three accounts, and it looks like this:


So if I use 7 € to buy myself a sandwich, I enter the following:


If I get paid 1000 euros by wire transfer directly onto my bank account by my work, I write this:


Finally, if I use my credit card to pay 15 € for a CD, that money goes straight from my checking account to the expense account and it looks like this:


This is an adapted version of the double-entry accounting system, used for my personal finance. The total of all the numbers on the Debit side must match the total of the numbers on the credit side.

Right now, I won’t deal with account opening and closing balances, as the goal is to watch my expenses.

I have decided to categorize each expense, so that I can see what my money goes into. I have decided not to publish the amounts, but to publish the percentages of the allocation of my spending. As of day 1, my percentages stand like this: (it doesn’t mean anything, since it’s day 1)


Let’s see how this evolves over the 30 days…

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