One of the habits I picked up during my university years was keeping financial records. Money was tight and I was responsible for all the expenses out of pocket. Such was the poor college life. Working part time during the semesters and full time during the summer.
I never went home for holidays because double pay was too attractive and I needed the money. During my entire college career, I went home twice. Once after my first year and another time before I started my unpaid internship.
Of course, some people had their parents' support. Some of them were brilliant enough to get a full-ride through scholarships. I wasn't one of those. I recall friends whose parents paid their rent. Some covered their car insurance. For me, I was lucky my parents still kept me on their medical/dental insurance plan.
With the help of Appxy's Pocket Expense app, I was able to keep track of my spending. I was never big into making a budget because I felt that was too much work and set me up for disappointment. It was much easier for me to keep track where the money was going and decide the course of action.
Besides, it's hard to make a budget if you don't even know your cash flow and total expenses. If you have never done this before, it might make more sense to track them for a few months. Then, you would have a better idea of how to approach your budget.
The data from Pocket Expense have helped me to compile my own records over time. While it may seem redundant as the app can make reports, but there is a reason why. There are some limitations on how the app handle different account types. I will most likely post about it in a future post.
Point being, I needed something to display all the numbers in ways meaningful to me and my family. I used Google Sheets back then and I still do today. Here are some of the templates I use:
It should be obvious that the templates do not contain all the categories of expenses and income for us.
Putting all the numbers side by side helps me gain perspective. For example, when do expenses tend to creep up through out the year? Should I increase the amount I put into investments? Or, is there something I need to cut back?
Even now with a family, the same principles still apply. Should we cut back on certain expenditures? Take an extra shift to increase income? Or, change to more cost-effective options?
In the end, it is nice to know where you stand and what you could withstand. For me, it does comfort me to know that we are being frugal, but not penny pinching.
When it comes to saving money, my grandparents had some of the best advice for me and my family. They always tell us to never compromise on healthy foods and hygiene products. A poor lifestyle would increase our spending for recouping our health. They also tell us that if we aren't saving money, cut out the unnecessary crap in life. If we still can't save money then, better learn to make more money.
Of course, none of those are to be financial advice to anyone reading this, but I have found them useful in my life.
How often do I review these data? The ideal time frame in my mind is every month. However, in recent years, I have only reviewed them every quarter or so.
For those of you who do not track your finances, I say give it a shot. You might discover something interesting.