This is a sponsored post.
Does the very thought of bookkeeping send shivers down your spine? If you think it’s complicated, hard work, or a long and boring task, we have some tips to show you just how easy and quick it can be.
Why Bookkeeping for Household Expenses is Important
Getting into financial trouble is easier than ever nowadays. Credit is available practically for the asking, and temptation to overspend in response to slick advertising surrounds us. Taking control of the ebb and flow of money through your household shows you the big picture. It helps prevent nasty financial surprises and you’ll avoid sleepless nights worrying about money because you’ll see ways to get through, or around, any problems.
Prepare Your Basic Books
The terms ‘bookkeeping’ and ‘accounting’ can sound a little intimidating, conjuring up visions of VAT deducting, tax allowances and payroll. Alongside those tasks, there’s a side vision of complex software, expensive computer systems or specialist training.
In fact, you don’t need any of those to get started with basic household bookkeeping. All you’re doing is balancing what comes in with what goes out, monitoring how and where money flows both ways. When the ‘income’ column tots up to more than the ‘expenses’ column, everyone is happy.
If you have even a beginner’s understanding of Excel, it’s easy to open a workbook and create columns for income and expenditure. You could add to those with columns that details how you paid for items or bills, (direct debit, cash, credit card, etc.). The income column may have only one entry each month if there’s a single wage earner in your family and you have no other income sources.
If you prefer a notebook to jot down what you’re earning and spending, that’s fine too. Any stationers will sell accounting ledgers, or you could go even simpler and just invest in an exercise book, drawing your own columns on pages with a ruler and pen. It honestly doesn’t need to be any more complicated to get you going.
At the end of the month, add up your two columns. Ideally you’ll have money left over to put into savings or, if you don’t, you can spot where to trim your spending.
Once you get into the habit of jotting down your spending, you’ll soon have a clear picture of exactly where money is going. You can forever banish that feeling that money is simply slipping through your fingers.
When You Need a Bit More than ‘Basic’
When you have one job and the company takes care of all your tax and national insurance through PAYE, all you have to think about is income and expense.
It gets more complicated if you’re self-employed, run a business alongside regular employment, or have income from investments or other sources. You may not have either the time or the expertise to make sure you’re not paying too much or too little tax and that you’re claiming all your allowances.
This is where bookkeepers and accountants play a vital role. But do you need both? Here’s the distinction:
- Accountants take your end-of-year books and through the information they contain they can prepare financial reports, fill in and file your tax return and make sure you’re getting the maximum back from your allowances. Their specialised knowledge also equips them to give business advice if they spot places where your money could work harder.
- Bookkeepers are the ones who prepare the books and keep them up to date throughout the year. They often work for various customers on a part time basis, so you could hire their services for however many hours you need each week or month. Bookkeepers understand what accountants need, so accounts are always properly maintained and presented.
Whether you keep it simple or hire professional help is less important than whether you get started or not. Taking control of money puts you in charge and it doesn’t need to take longer than a few minutes each day to record your transactions.
Disclosure: This is a paid for post.