Wanna get prosperous? [ get Free Expense Template inside]

Happy Diwali and Prosperous New Year to everyone.

Prosperous new year messages got me thinking that we won’t know our prosperity until we track and manage our expenses; that is including the concept of budget in it. Here is my effort to explain how to manage the expenses.

How to manage your expenses?

Step 1:

First compile list of all the places from where you get income. With this you will get list of all your payees/employers/customers/etc. paying you in you banks accounts, or directly in cash. Payment method usually would be either be cheque, NEFT, cash etc.

So we now have 2 Important lists to make

  1. Payee List
  2. Payment Method


Step 2:

Login to all your bank accounts and download the transaction details of the current year starting from Jan till today’s date (alternatively if the yearly records are too many you can download the records of only the current quarter till today’s date)

Transaction details also know as e-statements can be downloaded either in form of excel sheet or csv (comma separated value) file.

Screenshot 2

Step 3:

Compile a workbook in google sheet (or in excel if you like)

  1. 1st sheet – Have a payee list and payment method list
  2. And add all the bank transaction sheets to the workbook

Screenshot 4

NOTE: Instead of creating a new spreadsheet workbook use a free template. Copy it to your google sheet and rename it as your own.

Free template

Step 4:

Add 7 new columns to the bank transaction sheets.

  1. Payment Method
  2. Payer List
  3. Income Category
  4. Payee List
  5. Expense Category
  6. Expense Sub Category
  7. Expense super sub Category


screenshot 5

Step 5:

Choose appropriate drop-downs for all the transaction records for the respective 7 columns mentioned above. This step is the most time consuming step, hence it is best recommended to update your expense sheet at the end of every month. You need to have patience and persistence to make through this step.

Step 6:

Once step 5 is complete you can now do the totaling. Create a new sheet called Dashboard and Find out

  1. Total expenses
  2. Total Income
  3. Monthly running expense
  4. Passive Income

Screenshot 7

Last Step – Step 7:

You can also find out how far are you from getting out of Rat Race. (Read book ‘Rich Dad Poor Dad’ to know meaning of Rat Race)

You get out of Rat Race when your passive income is greater than monthly running expense.