Here’s how it works.
Download a blank Specific Ledger Form here.
List the budget category at the top of the page. Again, you should have a separate Specific Ledger for every category in your budget. You are separating your expenses by category.
In addition to listing the budget category at the top of the Specific Ledger, you make 4 columns on each specific ledger so you can record your actual purchases; date, location, amount, and limit.
Let’s say I have a budget category of “dinners out” and I am making a Specific Ledger for that category. I would place that budget category (“dinners out”) at the top of the Specific Ledger. I have a limit of $100 in this category so I would put that under the ”Limit” column. Then I would record my “dinners out” expenses and change how much I have left in the “Limit” column accordingly. For example, let’s say I ate at Gordito’s for $15 on September 15. Under the date column, I would write 9/15. Under the location column, I would write Gordito’s. And under the amount column, I would write $15. At the end, I would subtract $15 from my limit of $100 so I know I have $85 ($100 minus $15) left in the Limit column.
If you do this every time you spend money, you can make sure you don’t go over your limit. And the goal isn’t just to spend up to the limit. If you cut your spending, that’s more you can put into savings or spend another time or for another purpose.
A Specific Ledger is like a General Ledger, because it records expenses. But unlike in a general ledger, you don’t record when you make money in a specific ledger. You just record your limit or maximum, and your expenses so you can stick to that limit.
A specific ledger can also be used on a particular expense category that’s giving you trouble, such as Dinners out, shopping, or music. Make another specific ledger for that particular category. Let’s say dinners out, set a limit for that category, say $100 and every time you dine out, record it in your dinning out specific ledger. When you hit zero, you’ve spent your limit and it’s time to eat at home.