Jan. 21, 2019, 11:04 p.m.
"What gets measured gets managed" - this phrase has never been more true when trying to juggle your finances.
A great way to manage your money is to track your spending. I created a money spending system on Google Sheets where I document all the money that goes in and out of my account.
The purpose behind my money spending system are:
With the three requirements above, I realised that a monthly budget is sufficient. And this brings me to the meat of this article which is how does the money spending system works?
The budget document in google sheet is the realization of the money spending system. I added more tabs to it in order to measure and keep track of my spending on a weekly basis. Below are some of the images of the monthly budget
The one to the right shows the structure of the monthly budget expenses vs income including the various categories. And to the left shows the weekly structure, Expenses vs Income.
You can further view them here: budget system.
The way this budget works is as follow:
I fill out this template at the end of each week and think about which areas I can reduce spending in. This has a huge advantage as I could be eating in restaurants a lot but then balance the books by spending less money the following week. - this goes with the point below about spending more when you see a friend. You spend more one week and less the next, so that overall you have a good average. And by the end of each month if I am below my planned expenses, I use those money for the capitals of my other projects.
As you can see, the static aspects of my money spending is captured on the planning expense section. Why? Because I can easily see this aspect by looking at those categories that must be fulfilled throughout the month, some examples include paying the rent or buying the TFL (transportation for London) card. Planning a flight etc.
While I try to live like a monk most of the time, spending as little as possible, I realise that in order to have a social life I occasionally spend a bit of money for going out which I also factor into my budget. That is how I tackle the dynamic aspect of my money spending.
Furthermore, the categories has helped me tremendously as I discovered that I became more creative and clever in my choices that hugely affected my spending. For example, in terms of food, I realised that I was spending less when I bought high quantity of food. This further helped me to understand how I can free up time (I love to perceive it as equation of time). I cooked a large amount of food which will last me two or three days which means I can spend less time in the kitchen and use that time for something else such as programming.
Getting into the habit of consistently tracking my finances made me think critically about how I was spending my money
Do you think this template can be something that you may want to try? If so check out the link:budget system. If you have further questions don't hesitate to contact me.