How my hate for overdraft fees convinced me to create a budget spreadsheet

One of the greatest life lessons I've learned over the last decade is probably the one that's the least exciting: budgeting.

Hear me out real quick before you give up on the topic...

Flashback with me real quick to 2015. I was renting a room in a six bedroom house in Alameda, CA for ~$750 a month. Including myself, seven people lived under the same roof (plus, an adorable dog named Otto). I had just moved back to the Bay Area after finding a job making $17.50 an hour doing social media marketing for a pet supply company (the worst company I've ever worked for).

Every paycheck I received was deposited directly into my checking account. No money was put in savings. I was living paycheck to paycheck and barely scraping by each month.

Every now and then, I would overspend and get hit with a $35 overdraft fee from the bank. To a lot of people, that might seem like an insignificant amount of money, but when it equates to two hours of work (at a company you hate), that "little" fee felt like a punch in the stomach every single time.

At first, I turned my anger towards the banks themselves. The typical thought would look something like:

"I'm already poor enough, and here they are stealing my money. Bastards! I hate banks!"

I would spend hours on the phone with the bank to dispute the fee... to little avail. At the end of the day, they were the overlords of my money (the little I had), and I either had to suck it up and get used to the overdraft fees... or do something about it.

One day, after getting slammed with yet another $35 fee, I angrily flipped open my laptop and hit the "Create new spreadsheet" button in Google Drive.

The initial spreadsheet (pictured in the header image), tracked only one thing: my recurring monthly bills.

For the next two and a half year, that's all I managed.

Most of the time, it was enough to ensure that I didn't get hit with any more overdraft fees. Unfortunately, however, there would be the occasional charge that would clear earlier or later than I expected it to, and bam... another fee.

Eventually, as my income and expenses began to slowly grow, I decided that my simple spreadsheet wasn't cutting it anymore. In December 2017, while creating my 2018 spreadsheet, I took things to the next level by adding... income tracking!

That little end-of-year revamp, as exciting as it might be (I know... yawn), actually lead to my annual tradition of upgrading my spreadsheet at the end of every year.

If you're looking for a place to start with creating your budget spreadsheet, here's a recap of the evolution of my spreadsheets over the years and where I hope it goes in the future:

2015-2017:

• Monthly bill tracking (rent, credit card payments, car loan payment, cell phone bill, etc.)

2018:

• Monthly bill tracking
• Monthly income tracking – After-tax w2 income, "side hustle" income (Postmates), and "miscellaneous" income (which was basically just my income tax refund)

2019:

This is really where things started to get intense. At the end of 2018, I realized I had accumulated nearly $89,000 of debt (a combination of student loans, an auto loan, and high-interest credit card balances). I started tracking every penny that came into or left my checking account in order to attack that mountain of debt and gets some control of my finances.

My spreadsheet grew to track:

• Monthly bills
• Monthly expenses – Categorized as: food/groceries, car/gas, entertainment, gifts, dog and "other"
• Savings and investments – For the first time in my life, I had more than $300 in savings and I officially bought my first individual stocks (most or all of which lost me money because I sold them at bad times)
• Monthly income – I attempted to increase my income sources by flipping items on eBay, picking up shifts at local bars (working sound for shows or working behind the food counter), and selling my unused items on Facebook Marketplace
• The changes to my income and expenses year-over-year

Every month, I used a zero-based budgeting strategy in order to live frugally and maximize my debt payments.

At this time, I was deep into the YouTube debt-free community. I had discovered Dave Ramsey and was determined to become debt-free and live a frugal life.

2020:

In addition to continuing to track everything from 2019, my spreadsheet had grown into multiple tabs that also tracked:

• Paycheck deductions – taxes, 401k contributions and benefit deductions
• Bills I shared with my roommate
• My debt balances (student loan and car loan)
• My credit card usage and balances

By the end of 2020, my two years of intense tracking and growth of income allowed me to pay off $60,000 worth of debt. My credit cards no longer carried a balance and my car was officially mine. Even amidst a global pandemic, my world started to feel a bit brighter.

2021:

I continued to track everything that I tracked in 2020, but also added:

• A tab for balancing my accounts to make sure my actual cash holdings matched the expectations of my spreadsheet – By this point, I had two checking accounts, a savings account at a physical bank, and an online savings account
• A simple tab for tracking my stock and crypto investments
• A tab with random pie charts (I love all the colors!)
• A tab for financial notes – Tidbits I picked up from the financial coaches I had spoken with

With my debt balance under $30,000 (less than one-third of what it was two years prior), I decided to consolidate my remaining private student loans.

I also pivoted away from the debt-free community and jumped into the vast world of personal finance and early retirement. After learning about "good debt" (which I'll get into more in a future post), I started to focus less on becoming debt-free and more on growing my savings rate and income.

2022:

My eight-year budgeting journey has led me to where I am today. My spreadsheet continues to track the same things I mentioned above. I've started refining my spreadsheet to rely on less manual input, and have spent that extra energy on digging deeper into a variety of financial topics. Areas that I've dug deeper into this year include:

• Separating my saving goals into buckets
• Tracking pre-tax and roth 401k contributions
• Mapping out my investment strategy, asset allocation and overall goals
• Tracking the positive and negative value of everything in my portfolio, including my non-liquid assets (such as my car) in order to determine my net worth

I will admit that in the early part of the year I spent a little bit too much time fiddling with my spreadsheet... but I've thrown myself an intervention and have slowed my modifications over the last few months.

2023 & Beyond:

Tracking numbers and improving my cash flow has become a bit of a hobby for me. I listen to money podcasts, read finance literature, and watch YouTube videos on a daily basis (yes, for fun... in my free time haha).

I'm a far cry from the 25-year-old who was constantly worried about those pesky $35 overdraft fees. As my budget spreadsheet has grown, so too has my income. I can't help but feel like there's definitely a correlation between those two things.

As I move into the future, my plan is to continue to grow my income and diversify my streams of income. Right now, the largest goal I am hoping to accomplish is to invest in my first rental property by the end of 2023. My current plan has me on track to hit my down payment goal by this time next year...

I'll keep you updated!

And feel free to ping me on Twitter if you have any questions. I might be slow to respond, but I'll definitely try to make some time if you mention this post =)