Cheat Sheets

Richard Connor

WHEN MY YOUNGEST son graduated college, he had two solid job offers. One would have allowed him to live at home for free and the other was halfway across the country. Guess which one he picked?

In fairness, the job far from home was more interesting to him and provided a great start to his career. I remember him sitting down with his mother and me, and telling us he was planning to move to Texas. We discussed the job, benefits and salary. Then he asked a question I’ll never forget: How do I know this is enough to live on?

I was working in the same industry, so I knew it was a good offer. But that doesn’t tell you what it takes to live in a different part of the country. I asked him to give me a few days to look into it.

My first instinct was to create a budget in Excel and research costs in the Dallas-Fort Worth region. But instead, I searched for existing budget templates—and discovered Microsoft had templates available for free on the web. I downloaded a monthly budgeting template and got to work.

It was logically constructed and easy to use. My son is an IT professional, tech savvy and way smarter than me, so I knew he would easily take to it. It had defined income and expense sections. The expense section was broken down into useful categories and easily customized.

Being an engineer, I had to improve it. I added a separate worksheet that mimicked his future paystub, so he could see the impact of taxes, 401(k) contributions and other deductions—such as those for medical and dental insurance—on his take-home pay. I sent it to my son, and he added data on housing costs, utilities and so on. It showed he would be fine. We used the data to discuss how much to save in his 401(k) and how he should set up automatic transfers to an online savings account. It all worked out well and has led to a successful savings program for him and his wife. The spreadsheet he built to track their wedding budget was a thing of beauty.

Recently, I did a similar search for a budget template. If you go to Microsoft Office’s online portal and search on “financial management,” you’ll find a slew of free templates. They span the range from personal to family to business budgets. With further searching, you can even find templates for specific items, like college, vacations, weddings, and lawn and garden. Many have graphics, so you can quickly grasp what the data show.

There’s a simple but surprisingly effective retirement planner spreadsheet. It takes in standard retirement inputs, projects your nest egg through to retirement and then details the potential annual payout over your defined retirement period. The data is presented in a graph that shows the growth up to retirement and then the drawdown as you spend your portfolio. True, it’s simplistic, but it allows users to rapidly and graphically see the impact of savings rates, rates of return, and delaying or accelerating retirement. That’s plenty of information to help prod a 22-year-old into starting to save 10% or more of income.

I’m a big fan of creating an annual family balance sheet. Sure enough, there’s a simple one ready to use. Have credit card debt? Use this calculator to find out how many months and how much interest you can save by making larger monthly payments.  Getting married? If you search the template section for “wedding,” you not only get multiple budget templates, but also templates for guest lists, save-the-dates, seating charts and more.

Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. Rick enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. His previous articles include Choosing LifeStep by Step and What Are the Odds. Follow Rick on Twitter @RConnor609.

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