Archive for category Excel
Sandbagging Your Personal Budget

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One of the program managers that I work with likes to hedge his bets by painting a bleaker picture than he should, in order to easily “make his numbers”. He’s a sandbagger extraordinaire, and I marvel at how he gets away with it. He’ll forecast his sales with a three-month slip in deliveries, even though he knows that he’s bound to the contractual dates. He pads his cost estimates on projects, never projecting any savings until the project is over. He should have theme music playing when he walks to the podium, maybe Led Zeppelin’s “When the Levee Breaks”. The accountants hate him, and I always take his forecasts with a grain of salt. In his world, the buzzards are always circling overhead, and there is no upside. He errs on the side of caution. If he ever loses his job, there’s a levee somewhere that could use his expertise.
Uhh, where did I put those sandbags?
Actually, he may have a point. What if we apply this concept to our personal budgets? You know, when we project next year’s expenses. Wait, you mean you haven’t done that yet? I’ve already forecasted two years into the future. Maybe I’m overzealous, but I like to have my path laid out in front of me. If you’d like, you can use the budget file that I created in Excel that I talked about in this post: Low Budget.
Time to fill them up
My point is, leaving a little breathing room in your budget is a good thing. The extra padding that you add to your expenses will cover the little things that we never budget for. I can think of several examples of unexpected expenses, such as:
- School pictures;
- Magazine subscriptions that you forgot about renewing;
- Fees for school field trips;
- Girl Scout cookie drives at work.
So, how exactly do we accomplish this? I like to look back at my expenses from year to year. I’ll calculate the escalation in cost as a percent, and add that to the latest expense amount for that budget item. For example, let’s look at car insurance. I’ll look back at my last three years, and come up with an average growth rate in the premiums:
Car Insurance Premiums
- 2006: $2,000
- 2007: $2,100, a 5% growth
- 2008: $2,400, a 14.3% growth
- 2009: $2,500, a 4.2% growth
I can take the average growth for the period in question, and add that to the current year’s expense to come up with a number for next year. In this case, I can just take the increases by year and divide by three. That would give me 7.8%. If I wanted to get technical, I could take the $500 increase and divide it by three, and then divide the answer by 2,000, which would give me 8.3%. Whatever. I’ll round it to 8%. It’s close enough for a projection. That would compute to a $200 increase over the current premium. Now, I’ll sandbag it by adding another 2%, or $50. In total, I’ll add 10% onto this year’s premium, or $250. The extra fifty bucks will either go in my pocket, or pay for some other middling expense that I forgot to budget for. I’ll use this process for any expense item that varies from year to year. Any items with fixed payment amounts, like a car loan, wouldn’t get any padding.
By sandbagging your expenses, you’ll create a cushion in your budget for any unexpected items that arise. And you won’t feel like a cheapskate when Girl Scout cookie season starts at work.
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Excel How-to: A Macro to Hide Blank Rows on a Spreadsheet
Today, a coworker asked me how to hide a row on his Excel spreadsheet. This was a fairly large spreadsheet, with about 150 rows and 30 columns. After showing him, he started to hide every other row, which would be an incredible waste of time for someone in his salary bracket. So I offered him a solution: a macro that hides (and unhides) the rows by pushing a button. Really two buttons. Here’s how I did it:
We’ll start with a simple spreadsheet. You can follow along with this one: Hide_Row_Excel_File_No_Macros.xls
If you’d rather view a completed file with the macros already present, click this one: Hide_Row_Excel_File.xls
Here’s what the raw spreadsheet looks like:
We want to be able to hide and display the blank rows, so we’ll need to write a couple of macros. First, we’ll put a formula in column D that checks if column C is blank. The formula =if(C6=”",”HIDE”,”") is entered in cell D6:
Then, we’ll copy the formula from cell D6 down the column through cell D40:
The macro will run on a simple loop, repeating for the necessary number of times. We’ll assign a number to each row to determine that number. It just a formula that adds one to the cell’s value above it in the column. We’ll enter the formula +E5+1 in cell E6:
We’ll copy this formula from cell E6 down through cell E40:
Next, we’ll establish the number of times the macro needs to run. We’ll use the formula =max(E6:E40) to determine the number of repetitions, and enter it in cell G1. We’ll enter a zero in cell F1; this will be used as a counter:
Now comes the fun part. We’re going to record a macro! It’s fairly easy. We’ll record a few simple keystrokes, and then edit them for our use. But first, select cells E6 through E8. Then, from the top menu, click Tools, Macro, and Record New Macro:
We’ll name the macro HIDE_ROW and click OK:
Now, we’ll record keystrokes. From the top menu, click Format, Row, and Hide:
Next, click the little Stop button that looks like this:
We’ll need to edit the macro that we just recorded, so from the top menu, select Tools, Macro, and Macros:
Then, select the macro named HIDE_ROW, and click the Edit button:
This will display, in Visual Basic, the code for the macro that we recorded:
We’ll replace the existing code with this. This will allow the macro to repeat for the appropriate number of times, and check to see if each row should be hidden or not:
When you’ve finished entering the new code, close the Visual Basic editor by clicking the X in the upper right corner. Next, we’ll want to make it convenient to run the macro. We’ll do this by creating a button. From the top menu, click View, Toolbars, and Forms:
This will display the Forms toolbar. Click on the second box down on the right hand side, which is the icon for the Button:
I placed the button over cells I2 through J3. A dialog box will pop up that will prompt you to assign a macro to the button. Select HIDE_ROW and click OK:
You can edit the name of the button by selecting the text and typing over it:
Now that we can hide the blank rows, we want to be able to display them again, or “unhide” them. Let’s record another macro to do this. First, select cells D6 through D40. Remember the steps to record a macro?:
We’ll call this macro UNHIDE_ROWS:
Then, we’ll record the necessary keystrokes. From the top menu, click Format, Row, and Unhide:
Next, stop the recording by clicking the following button:
We’ll want to create another button for the new macro, so let’s display the Forms toolbar one more time by clicking View, Toolbars, and Forms. The Forms toolbar looks like this:
Select the Button icon, and place it over cells I6 through J7. Assign the UNHIDE_ROWS macro to this button:
To finish, edit the text on the button:
Now, just click the buttons to run the macros. Click the Hide Blank Rows button to hide the rows, and click the Unhide Blank Rows button to display the rows. If you have any questions at all, please feel free to ask them in the comments. I’ll get back to you promptly.
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Excel Tip: Have Your Cell Contents = Tab Names
Posted by enrique s in Excel, Productivity on July 8th, 2009
It’s time for another edition of Stupid Excel Tricks!
One of my coworkers recently asked me an Excel question. He had a spreadsheet with multiple tabs, and wanted to have the value in cell A1 on the respective worksheets to be the name of each tab. I knew that it could be done, so I searched the deep recesses of my memory for the answer. When it didn’t turn up there, I went to Plan B. It’s a good thing that I save everything to my computer using my foolproof file naming system, otherwise this fool would have never found it.
This formula can save you the time of not having to type a heading on each tab. I’m not sure exactly how this formula works, but I do know the basics. First, rename your tab by right-clicking on the tab and then left-clicking on Rename (you can give it any name that you’d like; I called mine SALES).
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Repeat After Me: Retirement First, College Second
Posted by enrique s in College, Excel, Retirement on May 24th, 2009
A recent U.S. News & World Report article recommended the obvious - fund your retirement accounts before you fund your child’s college education. I agree. While there are many vehicles to pay for education expenses, you are probably the only source of your retirement savings.
I say probably, because unless you’re a civil servant, or your company is still offering a good old-fashioned pension, your 401(k), IRA, or Roth IRA may be your primary retirement savings. It’s a pipe dream to think that you can live on your Social Security benefits. If you put off contributing to your 401(k), you’ll also be missing out on your company’s matching contributions. This is free money that you do not want to pass up.
Let’s look at an example of a 22 year-old with a $30,000/year salary, contributing 10% to his 401(k), with a company match of 50% of his contribution, or 5%. We’ll assume he gets a 3% raise each year, and a growth rate of 8% on principal. We’ll assume he has an epiphany at age 30, and decides to invest in his child’s education for 4 years rather than his own retirement: click here for the Excel file
As you can see in the attached file, the contributions that he didn’t make, plus the company match that he missed out on during the 4 years, total under $25K. However, when you take compounding into account, he’ll have $238K less in his account at age 62.
That’s almost a quarter of a million bucks that he’s passing up by not funding his 401(k) for just 4 years. Quite an opportunity cost! I hope Junior can land a decent job when he graduates.Maybe he’ll become a lawyer.
But, there are other ways to pay for school, without sacrificing your retirement savings:
- First, tell kids what college costs. The college they have in mind may be WAY out of your price range. Plot out a strategy before they have dreams of a 4 year vacation to Sunshine U.
- See what financial aid you can get from the school. Another plus: retirement savings is not part of the calculation when determining financial aid needs, so sock it away in your 401(k). Even with the financial aid, remember to add 10-20% on to college costs if your student is planning to live at the school.
- There are student loans, scholarships, and grants available for education. Apply early so that you get first crack at them.
Finally, look in your own backyard. Students can also live at home and go to state schools to keep costs down. And don’t dismiss community colleges; if you’re willing to learn, you can learn anywhere.
Follow me on Twitter: CorpBarbarian
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Overhead Rates, Part 2
In Part 1 of this series, I gave an overview of the different categories of overhead rates. In Part 2, I’ll show you not only how to calculate overhead rates, but some of the strange lingo that’s part of the process.
The two factors that determine overhead rates are the base, sometimes called the burdenable base or prime dollars, and the expense, or overhead. The overhead rate is merely the ratio between your expenses and your base.
The Base
The base, or prime dollars, is comprised of several categories, or “pools“:
- Direct Labor - employees’ wages/salaries that work directly on specific contracts. This can be further broken down into separate pools for Engineering, Manufacturing, Field Service, etc.
- Direct Material - raw material or parts purchased for specific contracts
- Subcontract Material - larger assemblies that exceed a certain dollar threshold
- Travel - travel and lodging directly related to specific contracts
- Other Direct Cost - items that don’t fit into any of the other categories
Overhead Expense
Sometimes referred to as “burdens“, overhead includes expenses not directly related to specific contracts, such as employee medical benefits, rent, electricity, etc. Expenses are categorized by pool. For instance, the maintenance expense for a drill press would be allocated to the Manufacturing pool, while the calibration expense for an oscilloscope would be classified as an Engineering expense.
The Calculation
The purpose of calculating the overhead rate is to see what the ratio is between your direct costs and your expenses. This makes it easier to spot trends, as both sides of the ratio vary year to year.
Here’s an example. Company A projects direct Engineering labor of $10 million, and Engineering-related expenses of $15 million for 2009. This works out to an Engineering overhead rate of 150%:
15,000,000 / 10,000,000 = 1.5 x 100 = 150%
Company B, on the other hand, has direct Engineering labor of $8 million, and Engineering overhead expense of $11 million:
11,000,000 / 8,000,000 = 1.375 x 100 = 137.5%
Company B has done a better job of controlling its overhead expense, and is better positioned to win future contracts from the government. Of course, this is a simplistic view, and the other overhead pools (material, travel, etc.) would have to be taken into account.
How can we apply this to personal finance? You could use your wages as the base, and calculate a year-to-year overhead rate using your expenses. You’d be able to spot trends over time. Expenses can be measured as a percentage of your income.
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Overhead Rates, Part 1
If you’ve ever worked for a defense contractor, you’re probably well acquainted with overhead rates. For those of you who haven’t had the pleasure of dealing with Uncle Sam on a daily basis, let me give you a brief rundown. They come in many flavors, such as:
Actual Rates
These are, as you would imagine, your actual costs. This information comes right off of your general ledger.
Projected Rates
This type of overhead rate is generally developed for an overhead rate submission to the government, or for a year-end projection. It takes into account any factors that have not been captured in your actual costs to this point. An example would be a higher than expected medical benefits expense, or an unfunded pension payment. Typically, this leads to:
Forward Pricing Rates
After projecting your overhead expenses, you’re compelled to disclose to the government any new intelligence that you’ve gathered. The vehicle used is called a Forward Pricing Rate Proposal. After this proposal is submitted, you negotiate with the government. If all goes well, the result should be a Forward Pricing Rate Agreement, or FPRA. The FPRA allows you to bid on jobs using your most current projected rates. It also establishes the billing rates for cost-type contracts.
Billing Rates
Billing rates may come from several sources: the FPRA, which covers most of your cost-type and fixed-price contracts; an FPRA which has been discounted based on an agreement with the government; and lastly, rates that have been negotiated into a specific contract, such as a time and material-type contract. Rates are established for billing time (labor hours) and material (purchased parts) by each category, such as manufacturing, engineering, or administration.
That’s a basic overview of the different categories of overhead rates. In the second part of this series, we’ll take a look at how overhead rates are calculated.
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Three Excel How-Tos: Now With Linked Files
I’ve gone back and revised three previous Excel how-to posts. I’ve added links to live Excel files, which will make it easier to follow along with my ramblings. Here are links to the new and improved posts:
Excel How-to: The SUMIF Function
Excel How-to: Creating a Pivot Table
Excel How-to: The GETPIVOTDATA Function
I find it easier to learn if I can follow along. Let me know what you think.
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A Simple Mortgage Amortization Table
Kevin over at the No Debt Plan blog recently advised his readers to avoid mortgage accelerator programs like the plague. He reasoned that you could set up your own mortgage accelerator program by adding 1/12 of a payment as additional principal to each month’s payment. I agree with Kevin. You can save a boatload of interest by making extra principal payments.
Sending in extra principal payments sounds good, but I think you need to see the impact - namely, how much interest you can save. So, I set up an Excel file to calculate the interest savings. You can access the file by clicking on the following link to my mortgage amortization spreadsheet:
Mortgage Amortization Spreadsheet
To use the spreadsheet, just do the following:
- Enter your mortgage amount into cell B2
- Enter your interest rate into cell B4
- Enter the length of the mortgage in years in cell B6
This will populate the rest of the spreadsheet. It will also calculate your monthly payment (cell B9), and the interest you can expect to pay over the life of the mortgage (cell B11). If you want to see how much interest you’ll save by adding extra to your monthly payment, just enter the amount into column H in the appropriate month, and the answer will be calculated for you in cell B16. You’ll also see the number of months that you’ve shaved off the length of the loan in cell B18.
I would definitely recommend sending in additional principal payments if you have the means to do so. Obviously, this only makes sense after you’ve retired all of your high-interest credit card debt beforehand, and have a healthy emergency fund established. But if your mortgage is your last outstanding debt, you can count on a return equal to your interest rate.
Now, open the spreadsheet and have fun crunching numbers!
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Standing on the Shoulders of Giants
I’m the office Excel guru, but I wasn’t always comfortable with computers. When I first starting working, we only had terminals that were hooked to a mainframe. The only software we used was the mainframe program. There was one PC, which was located in a small side office. Only one guy in the office was qualified to do anything on it. To me, the office that the PC was housed in was a “shrine” to our computing ignorance.
Quick jump to my second job. I got to work with an “older” gentleman of about 50. His name was Ed. He took the time to teach my younger, snot-nosed self everything he knew about Lotus 1-2-3 (this was in the mid-’80’s), including how to write macros. I didn’t think people that age even knew how to turn on a computer. This guy was really good. I was an eager student, and we pushed each other to become better.
Jump ahead another 5 years. I’m interviewing for a new job, and the question comes up about my computer skills. “So, you know how to write macros?” Heh-heh. Sure I do. I was taught by the best. Let me at those spreadsheets!
I got the job.
I got a lot of jobs because of my proficiency with computers. But I wouldn’t be where I am today if it wasn’t for Ed. Even though I’ve switched from Lotus, to Quattro Pro, to Excel, the skills were transferable, and I never feared a new software package again.
Thanks Ed, wherever you are. You continue to inspire me, and I still stand on your shoulders. Even though I’m about 40 pounds heavier.
I’m also standing on the shoulders of the blogs that inspired me to start this blog, such as Free Money Finance, The Simple Dollar, Get Rich Slowly, Problogger, Yet Another Blog About Money, Unclutterer, My Two Dollars, Smart Passive Income, Brip Blap, and many others.
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Excel How-to: The GETPIVOTDATA Function
In a previous post, we created a simple pivot table from a list of Excel data. Today, we’ll link the pivot table data to a spreadsheet using the GETPIVOTDATA function.
Note: You can follow along with the how-to by clicking on the following Excel file link: The GETPIVOTDATA Function.xls
(In the attached file, the tab labeled “Sheet1″ contains the pivot table, and tab “Sheet2″ contains the spreadsheet)
We’ll start with this pivot table as our source data:

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