Dow down by 777

Triple seven will carry a different meaning after today. According to an article in CNN money, it is the biggest single day drop in the Dow ever. This happened after the failed passage of the $700B bailout plan in the US House of representative. With the US Congress not reconvening till Thursday, we maybe expecting for more drop in the next few days, spreading in the global market.

Even without this recent dip in the Dow, the impact is already apparent. In the UK, there is Nothern Rock and Bradford and Bingley. In Europe, there is Fortis. It looks like no financial institution is safe.

Will we have the same exposure in the Philippines?

Thanks Salve

Surprise! Surprise!

Back in August, my comment was featured in an Inquirer.Net (Philippine Daily Inquirer) article about making the first million. Now, Salve had again included my entry on doubling your money in the Money Smarts blog.

Funny thing is, I am one of the daily readers of Money Smarts and it is good to know that Salve had a chance to visit my blog. In fact, Money Smarts is the very first blog that I read and had encouraged me to start my own.

Thanks Salve.

Let me start again Drawing my first Belfast budget

For the past few years, our budget strategy was simple. Every month we allocate a certain amount for savings and investment. What remained we can spend on anything. It worked perfectly especially when both my wife and I were working - my salary covers the expenses, hers goes to savings and investment.

With all that is happening around the world, I feel that this approach may not be enough. We need a better way to manage our money.

I started reading on ways to budget but did not find one that I feel I could stick with. Not until I read the book "Money for life" written by Steven B. Smith.

In this book, Steven was talking about the financial journey of his client - the Richardsons. He discussed the credit problem his clients were facing and how they were able to control it. The book is inspirational and a good read but that is not what got me interested.

In the book, Steven was advocating an idea on managing money through a budget. His system is based on one simple rule - you should know where your money is going before you even got the chance to spend it. For this, he is pitching his product, Mvelope, which is an online service based on the envelope budget system.

I like his product but not enough to pay for it. So what does an experienced IT professional like me do in this situation? I develop my own in Excel. If you want a copy, just download through this link.

The workbook has two sheets - one contains the budget and another for recording actual expenses. The budget is divided between the Income and Envelope section (allocation section). To customise the spreadsheet, you need to update the Pay dates and the expense categories in the Envelope section.

I believe that the money on hand should also be pre-allocated to the appropriate envelopes during the preparation of the initial budget. You can use the Initial Bal column for this.

There is also a column that calculates the monthly average of the actual expenses for completed periods. This can help you during budget planning in determining how much allocation or adjustments needed for each envelope.

Again, this spreadsheet is available for download through this link. If you want to know more about the envelope system, there is a good introduction on this topic written by Dave Ramsey.