After reading The Power of Less, Zen Habits author Leo Babauta’s new personal development book, I have been inspired to simplify the way I live my life — focusing on only one area at a time.聽 My first focus: finances.
I have always spent my money freely by eating out too often, random online services, limitless subscriptions, toys, gadgets and so on and continue to find myself waiting anxiously, if not desperately for my paycheck – time after time.
I made a resolution this year to live in the moment and just as importantly, become more aware of life and relationships. If you find yourself wanting the same things in life, I invite you to follow along.
The problem put simply:
I should have more money in the bank at the end of the month than I did at the beginning, consequently reducing unnecessary anxiety that comes along with money troubles.
The simplified solution:
Use a basic spreadsheet to track and budget my spending.聽 I will then use this information to become consciously aware of my spending habits, identify the essential and then eliminate what’s left.聽 I’ve chosen to use Google Docs for this experiment as it is tied to my Gmail account that I already happen to use (too) often.
Many of you may swear by a service such as Mint, Yodlee or Quicken Online to tap into your bank account and make these estimates and budgets automatically — and that works great, but in my case I felt like I needed a more drastic and to the point solution.
I started by making a brain-dump of everything I spend money on — rent, subscriptions, eating out, web hosting, automotive expenses etc.聽 I placed these items in Column A.聽 My list looks something like:

Next, I tried my best to make accurate estimates on how much I spend per month on each item.聽 I placed this info in the corresponding row of Column D.聽 Being inaccurate only hurts your chances of fixing the problem,聽 open up your online banking service of choice and try to be as close as possible.
I left column B and C in case in the future I wanted to Categorize my spending or note what account is used for the transaction.
Giving myself a few rows buffer (for spending that I may remember later on) I created a cell that adds up and displays the amount of spending in Column D by using the formulas button.聽 Following this, I made a cell directly to the left that holds the amount of money I make or expect to make in a given month.聽 Finally, I made a cell that then subtracts my total spending from my monthly income — leaving me with a solid ‘golden’ number.
Now that I have this ‘golden’ number I am able to know the amount I will have at the end of the month IF I stick to the budget outlined.聽 The reason this method works for me is that the reward for conscious spending is clearly marked and I have something tangible to look forward to for my efforts.
Due to all of the services available at our fingertips, common sense is often overlooked.聽 Getting on track, especially in my case, is first preceded with overcoming the psychology of the situation and little exercises like these — albeit low tech and somewhat obvious — are invaluable to the process.聽 The goal is to know exactly where your money goes and how to stop it.聽 I have accomplished that.聽 Hopefully this method will help you make the necessary cuts in your spending to live a more simple life.