How important is that green column?
This page talks about the green column next to your master budget grey column on the OOTD budget page. If you came to this page from outside the OOTD website and would like to know more about the OOTD website, please visit us at:
http://www.myexp.org/OOTD_gate.php
Imagine yourself an 8 years old kid who just got a formal weekly allowance of $2 per week. The agreement and pledge from your parents to give you $2 each week is great news because you happen to be a real natural young money manager and you have already decided that you will only spend one dollar and save one dollar each week.
Now as wonderful as this weekly allowance pledge from your parents sounds, what really makes this meaningful to you is their consistent action to follow up on their pledge by making sure that $2 actually slide into your pocket each and every week from now on. Any failure on their part to ensure that this happens will mean that you will not have the $1 per week to spend nor the $52 you would expect to see saved after one year, and you might rightly say to your parents that the allowance idea sounds really great but means little to you if you don’t actually see the $2 in your pocket week after week.
The point I am trying to make here is that the Plan no matter how great, is of little real meaning and value if not followed by the required action, and with the help of this illustration it should be easier to see the importance of that green budget column to the right of your main budget column on your OOTD budgeting page.
OOTD budget columns
The green column’s purpose in life is to help you make sure that your plan (the budget) is actually being followed and acted upon month after month, to monitor the actions on the ground regarding money handling and to easily see how they fair against your set budget amounts. In other words, your budget on the grey column is you plan showing how much money you have coming in every month and how much of it you pledge to spend on anything, your green column next to it is where you record your actions on the ground for the current month.
The green column is a column solely dedicated to tracking your actual cash flow, the place to record the actual figures for all your budgeted categories for the current month, meaning how much you really earned and how much you really paid out for each category. The master budget grey column is like that pledged weekly allowance, our plan, our budget to live by, while the green column is a record of what is really happening on the ground.
Having this green column next to your master budget column helps seeing at a glance how you are actually doing by your budgeted amounts, the practice of doing this on a regular basis as you go along is the purpose of the green column and what will ensure that your budget does not become a meaningless concept.
If you read a little about good budgeting practices, you will hear over and over again that a budget is a meaningless list of numbers if we are not living by it and sticking to it. There is no denying as to how true this is, and while setting your budget right to begin with is crucial for any successful budgeting, once this was done, really the bulk of your budgeting practice and time goes on keeping track of how you are following on your budget in practice every month and ensuring that you are indeed living by your budget. If our budget was set properly to ensure that we do not spend more than what we have and if we live by our budget in practice, we will be living within our means guaranteed.
Many analysts say that leaving beyond our means by both “Main Street” and “Wall Street” was the root cause behind the 2008/9 global economic crisis.
That is where the green column on your OOTD budget page really shines. The green column was designed for lazy people like me who do not take much pleasure in spending too much time budgeting and tracking financial transactions day by day. It is very easy to log into my OOTD budget page and just plug in what I spent in the past day or couple of days on restaurants, movies work meals and any other category set in my budget.
It does sound like a lot of work at first but if we remind ourselves that without keeping track and knowing what the actual amounts are our budget is meaningless, it’s easy to find the motivation and with that, the magic of the green column. Once you start using it daily you realize how easy it is to just plug the latest spending amounts right away and forget about them knowing that you can come back any time to find out how much you really spent on what for the month. Something that should leave you feeling empowered and out of the darkness of money handling.
But that is not all on the green column. To help make your life even easier with the task of tracking your cash flow each month, you also have the OOTD end of month reports, In Field Math (more on this in a bit), closing periods, and the automatic resetting of the green column for a new month, all done at a click of a button.
End of month reports
End Of Month Report option
The end of month report allows you to save all your budget figures for the month (both columns plus summary totals) to your e-mail in one of two formats before you start a new month on the green column. A single mouse click as seen in the illustration above, initiates the report generation process and you are free to start the new month on the green column without loosing your last month’s information.
Close the period and reset the green column
Reset for new period link
At the end of the month or whatever your budgeting period is (you can close and start every week), you want to close the period and reset the green column for the next budgeting period. You may also wish to start with some category amounts on the green column remaining unchanged from the master budget amounts like rent, mortgage, insurance, salary because they are relatively stable and unlikely to change, while all the others are reset to zeros. All this setup is automated in OOTD and can be done with a few mouse clicks. You can specify which category amount will be copied over from the master budget to the green column and which will be set to zero by clicking on the small icons between the columns for each category and setting the arrow for copying and the arrow with red X for zeroing (be sure to save the grey column once all the categories are set). You then click the reset link as shown above and use the Period Close and Reset page to finish the task.
In-Field Math
In-Field Math
The In-Field Math feature is like having a calculator built into every category’s amount field, it allows you to add or subtract new amounts to existing amounts quickly and easily and it saves you from having to do the math while quickly updating the green column. Simply add new amounts to existing ones as shown above, and when you click the save button at the bottom of the column the result is calculated and saved in that budgeting field.
One last comment here about making the most out of the green column. Categories that are fixed every month because you put set amounts aside even when you don’t spend them, like car repair and maintenance or a monthly portion for the car insurance and other expenses that are paid annually, are also good candidates to be copied over from the master budget to the green column when resetting for a new period because in these cases even though you may not have the expense during the budgeting period, you are putting that amount aside somewhere in your bank account which should really be treated as money spent, only it ws spent for the purpose of putting it aside and saving it for when that car insurance bill comes along which is when the actual spending happens. So to simplify things, treat all those budgeted amounts that you put aside for annual bills, as if you spent them each month on the green column because you want to know that this money is not available for anything else. With this practice, designated money for all those annual bills will be left in your bank account (or you can move it to another account), and your OOTD budget will help you see how much you can afford to spend on other things each month.
This is like saying that you actually spent your monthly budgeted amount for car maintenance and repair each month even if you did not have that expense, and it is very easy at the end of the year to look at how much you really spent on maintaining your car versus how much you budgeted for it, reconcile the two and realize whether you need to budget more, or take the surplus as a bonus and adjust your budgeting for this down if need be. A good example is when we finally replaced our older car with a newer one, we realized that for the new car we were spending way less than we did for the older car on repairs, so after the first year we looked at the numbers, took a nice surplus of cash that we had in our bank account, and adjusted the budget for the new car down to reflect that we are now paying less on car maintenance and repair. Always nicer then to have repair bills coming and no money to pay for them.
With the green column and all the features around it, tracking my actual spending for the month on a daily basis became second nature and less of a chore faster than I thought it would. And so my advice is, after having set your budget in the master column (grey), use the green column daily if you can to record your actual spending for each category using the set it and forget it approach. It will become second nature before you know it and will empower you financially.
My motto is “Let’s do all this one time setup work so that we can do as little work from now on while getting the benefit that we want“. Let’s face it, it really is about being shamelessly lazy with boring chores like budgeting 
Happy budgeting
Shony
