Raina Tara March 13, 2021 Spreadsheet
To know if a household budget spreadsheet software is user‐friendly, try several programs online and see which ones are easy enough to use by people with basic budgeting and computer skills. The layout of the spreadsheet should not only be easy to understand, but also be able to present all the necessary information in a glance. It should contain just the right number of graphics and details to avoid confusion for its user.
The need for new and/or different systems to support a company‘s growth is not avoidable. Just plan to address them before the pain at each juncture is so great that your people start leaving for a company that has better, more efficient systems in place. When you do start this planning phase, be sure to use experts that are not tied to a particular solution. You know the old saying... When all you have is a hammer, everything looks like a nail. In the past, the easiest way to share a small database was to create a spreadsheet and email it to your collaborators. This time‐tested method has withstood more sophisticated competition for several reasons.
The second wall that hinders a small company‘s growth is similar but another rung up the ladder. The system that supported five people is starting to break down under the strain of 30 people. A new type of thinking must be applied to streamline the company‘s operations and automate them ‐ again. This time, the system will be larger, will take longer to design (or purchase), and cause more of a disruption in company operations when it is implemented. What happens internally when a system no longer meets the needs of the busy employees? They start creating workarounds to get their job done... and often their solutions involve spreadsheets. And so, the spreadsheet culture is reborn and the cycle begins again.
The second component of a good real estate investment spreadsheet is a long cash flow projection period. Property investments are typically very long term ‐‐ from 10 to 20 years on average. In particular, if you are buying real property for long term portfolio holdings, it makes sense to have at least 10 years of monthly or quarterly data, and even up to 30 years. This ensures you capture the entire future cash flows, and enables a much more accurate determination of net present value, internal rate of return, and capitalization factors.
We want to look at costs, so we reserve a tab in the real estate spreadsheet for that. Here, you have a decision. You can either make a large list of standard rehabilitation and operating costs or a smaller list of costs specific to this property. The first option allows you to use the Excel spreadsheet for other properties which are probably not the same. The second option keeps things small and tidy and might work if this is a once‐off investment. Either way, you will want to include all of the costs in a timeline schedule by week or month. This would include the re‐roofing, paint, plumbing, electrics, landscaping, electricity if you are responsible for it, insurance, etc. The financing costs are likely to be the most complex because you need to estimate not only the interest rates of the loan or loans you get, but the principle amortization, mortgage insurance, etc. This can be complex from a calculations standpoint. How granular you get with costs is up to you.
Like I said previously, starting out a budget plan for your family will be quite challenging at first. For one, you will to start changing your shopping habits, as there will already be limitations to your allowance. Also, you will have the responsibility to take note of every single penny that you use, for your budget plan will be accurate. However, if you have the tools to help you, it won‘t be that hard. Plus, you‘ll eventually reap the benefits of budgeting in the long run. So while it‘s not yet too late, acquire your family a budget spreadsheet and kick off your budget planning.