I have started to budget and track my income and expenses using a simple spreadsheet. It have a better overview of where my money is going, but due to my work history I have money spread over accounts in four countries and four currencies. How can I get a feel of budget and expenses without being confused by currency fluctuations?
If I use a single spreadsheet for all currencies, then currency fluctuations shows up as a gain or loss. If I use one spreadsheet per currency, then currency transfers show up as a gain or loss.
More specifically, currently, I use GBP for my spreadsheet. For any transaction on a non-GBP account, I write the transaction as
x is the transaction in non-GBP and
y is the day mid-market exchange rate. The spreadsheet then shows the account in GBP even though it's really in EUR, SEK, or CAD. I apply a correction monthly for currency fluctuations, which shows up as a gain or loss in GBP. Since I have no intention of converting EUR to GBP, that gain or loss is not really relevant. But if I don't include my EUR account in the same spreadsheet at all, then every transaction from my GBP to my EUR account shows up as a loss, which is not accurate either.
How can I correctly account for having money in different currencies, without currency transfers or currency fluctuations ending up as gains or losses? Recently, monthly changes in GBP/EUR multiplied by my Euro savings easily exceed my net monthly income or expenses, so I'm losing track of what my “proper” income and expenses are...
(Note: this spreadsheet is purely to inform myself where my money is going. I do not need this information for any other purposes)