How to Keep Track of Your Personal Finances

Often enough, we find ourselves getting caught up with unpaid bills and empty wallets in the blink of an eye. We ask ourselves, “Where did all the money go?” We scramble to track back the cash outflow from our bank statements, collating the many receipts we could find stuffed in our wallets, and rack our brains to think back on where the majority of our money was splurged to.

The next moment, we spot something we desire and spend the money on impulse even with the knowledge of being short on cash at the back of your minds. And before we know it, we become cash-strapped.

So the question boils down to how do you think you can keep track of your personal finances and manage your spending well without feeling guilty or broke? We share some tips with you on ways to monitor your finances well.

(Source: moneypincher)

1. Start by Tracking Your Expenses

By means of a plain piece of paper or a computer spreadsheet, get the ball rolling by creating a Personal Projected Budget for each month of the year. Try searching online for free printable Budget Templates to obtain user-friendly and fuss-free spreadsheets.

We recommend that before you even begin jotting down a budget from scratch through filling in the areas with a guessed estimation, track down your current expenses beforehand to get a better overview of your spending. Record your every purchase down for a period of a month through as many forms of spending you can gather, such as your receipts and bank statements.

For example, you might have jotted down a reasonable sum of $150 for a budget hotel staycation. However, after doing a bit of online analysis, you might have realized that you require at least $250 for your preferred staycation. Do your research!

(Source: psoda)

2. Create a Budget

Now, you can get started with creating a budget you know you can stick to. You can further break down your list of expenses into sub-categories such as Transportation, Daily Necessities, Phone Bills, Insurance, et cetera and have a better overview of different areas your spending goes to. Start off aiming for short-term goals, before saving for your long-term goals such as retirement.

(Source: reviewguy)

3. Monitor Your Spending

Begin to monitor and track your spending closely once you’ve decided to stick to your newly implemented Personal Projected Budget. Spend a reasonable amount of effort working on your target while resisting splurging on impulse. If you want something really badly, jot it down on your finances tracking list and work towards saving for the item.

For a more sophisticated approach, you can always track your expenses through the means of a software. Here are a few platforms that our team recommend. Of course, you can always choose a software you prefer and feel more comfortable with.

a) Mint

Mint is a free, web-based personal finance tool that allows users to plug in to their banks, investments and other financial accounts for an overview of your current financial position. We love their graphics that are not just easy to organize but also pleasing to the users’ eyes. Money saving just became a whole lot easier and more visually attractive to everyone!

b) You Need A Budget

Get off the financial roller coaster with an award-winning budget interface proudly presented by You Need A Budget. Although you need to pay for the usage of this software, it comes free for a month for anyone interested to try to see its suitability and whether it helps apply in your daily life.

c) BillMinder

Don’t worry about fumbling through your inbox for monthly statements now, because BillMinder helps organize statements into simple calendars to keep track of all due dates. It comes with charts and reports, notifications and more features that comes handy to users. Currently, the software doesn’t offer a free version, but you might wish to invest in a good software to save up better in the long run.

(Source: wisegeek)

4. Adjust Your Budget

To perfect your Personal Projected Budget, make adjustments whenever necessary. For example, if a particular spending goal is easy to meet, try cutting it down further and saving a bigger sum or shifting that amount over to another category which requires setting a reasonably higher budget. To sum it all up, it’s all about setting your budget right and making effort to stick to your goals. We also recommend downloading the finance apps on your electronic devices to track your expenditure on-the-go!

Good luck! 🙂

3 Simple Tips To Stop Living From Paycheck to Paycheck

Living barely within your income is not a laughing matter. When you are living paycheck to paycheck, you live a life of constant stress, worry, and dread that you might be stuck in an unfortunate debt. It is a struggle to gain control of your money and your commitments. So, here are 3 Simple Tips To Stop Living From Paycheck to Paycheck…

1. CREATE A SYSTEMATIC FINANCIAL OPERATING SYSTEM

In order to cease your worries, a huge turnover can be money flow management. You must give conscious effort to know about where your money flows in and out. Once you have control over your money flow. Then, you will be able to create a systematic financial operating system that consists of: money flow management and budgeting.

Money flow management is accomplished by using a ledger or an app. There are a couple of efficient yet free apps that can help such as: EXPENSIFY, EXPENSE MANAGER, MONEYWISE, POCKET EXPENSE PERSONAL FINANCE, and MINT.

Image Credits: wikihow.com/Do-Envelope-Budgeting

Likewise there are a couple of budgeting such as STATIC or FLEXIBLE budgeting. For personal finances, I highly recommend a simple technique called ENVELOPE budgeting. It starts by storing the cash into separate categories of household expenses that are allocated in separate envelopes.

Budgeting will surely help you gain clarity and control. Start by writing down your monthly income, followed by your monthly expenses, and then subtract the two. Plan and search for a suited technique.

2. PREPARE MONEY FOR YOUR BILLS ACCORDINGLY

Some bills are due frequently while some are semi-annually. Prepare money for your bills accordingly by noting them down. If you have a monthly bill, you may try a trick called half payments. For half payments, you prepare the payment for the bill by subtracting half of the bill’s amount to your bank account per two weeks (bi-weekly).

3. BOOST YOUR EMERGENCY FUND

Prepare for the unforeseen events and financial failures by saving at least 8% of your income per month. You shall call this category your “emergency fund”. It is better to save a certain amount of money than to have nothing save at all.

How And Why You Should Save For Retirement Before Your Mid-30s

When you are young, in your 20s or 30s, retirement feels like a looooong way ahead.

Typically in your 20s, the only person you have to spend for is yourself. In your 30s, you will have new financial priorities such as the wedding, child’s schooling, house loans, etc.

If you consider all the aspects of your finances and fast-paced life today however, you will realize that it is the best time to start saving for retirement before you hit 35. Even the strategies to save for retirement are in-lined with the ideal to start saving while you are young.

Here are the 4 strategies to save for your retirement before your mid-30s…

1. PAY OFF YOUR DEBTS

It makes sense to pay off your debts or at least your high-interest debts before you save for your retirement. Since not all debts are equal, pay off your high-interest debts first followed by the lower ones.

2. SET UP A BUDGET

Systematically allocate your income onto different categories and stick to that budget. Do not spend beyond what your budget is for that month. This allows you to save regularly rather than arbitrarily.

3. SEEK FOR AN EMPLOYER THAT SUPPORTS YOUR GOALS

Image Credits: American Advisors Group via Flickr

As much as possible, look for an employer that supports your long-term goals. If your employer offers Retirement or Pension Plan then embrace this company benefit.

4. TRACK YOUR RETIREMENT SAVINGS

During your…

a. 20s

It is best to start saving at least 5% of your income or sign up for your employer’s Retirement Plan. Avoid debt as much as possible and get educated about your finances.

b. 30s

Invest your money and check whether it is in lined with your goals. Increase your contribution to your Retirement Savings while preparing for your child’s school fees.

c. 40s

Make thought-through decisions about your expenses and cut down the unnecessary. This is when you hit your savings to the maximum. By this time you should have at least S$80, 000 to your Retirement Savings.

d. 50s

During your 50s, you must prepare for the unexpected. Seek the financial experts’ help if you must. Then, plan your exit with glee because you are well prepared for it.

Note: This is just an ideal time frame for your Retirement Savings. Contemplate and reconsider the realistic measures that are suited for you.

The Secret Habits of Financial Savvy People You Must Adopt

Some people struggle to make ends meet while others succeed in their finances. Have you ever wondered why? The answer may be a combination of different factors that play a significant role and one of them is repeated behavior. An individual’s repeated behaviors or habits are learned from young and affects the person’s decisions in the long run.

So, understanding the value of money and being taught at an early age to save your allowance, watch your spending, and note down your expenses can really boost your finances throughout your life. As the saying goes, old habits are hard to break. Without further ado, here are the Secret Habits of Financial Savvy People That You Must Adopt…

1. WATCH YOUR SPENDING

The first step is to be aware of your spending patterns and exactly how much you are spending per month and per annum. This will help you decide how much you shall save and help you to highlight the unnecessary expenses.

Recording all your expenses, no matter how big or small they may be, can help you plan your budget wisely. Find the perfect (and Free) money management app for you here.

Lastly, stop buying useless stuff that you do not need. Rethink if buying overpriced coffee rather than making your own coffee at work saves you more. Instead of buying lunch, pack your own lunch for at least 2 months. It may seem simple, but these unnecessary expenses add up.

2. SET SMART FINANCIAL GOALS

Develop a habit of financial goal setting to know where you are going and to plan how you can get there. Write down your financial goals with a witness (e.g., spouse or a close friend) and contemplate the monetary milestone you would like to accomplish in the next 2 to 5 years. Track down your monthly progress.

This habit is practiced in businesses that have quota system or in fundraising events, but it surely works for personal finances too!

3. ACCOUNTABILITY AND INDULGENCE

In most cases you must you shall practice the habit of being accountable and owning the responsibility in your spending. Be accountable of your spending by managing it and by following your financial goals. It is an important habit if you want to maintain consistency and progress.

Image Credits: TaxCredits.net via Flickr

In order for a habit or a behavior to be repeated, it must be rewarding. Set aside at least 3-5% of your income to a category called “incentive or shopping money”. I personally do this through the envelope budgeting system (learn about it here). Giving yourself a well-deserved treat after the whole month’s work will surely keep you going.

Use Envelope Budgeting To Manage Your Money In Just 3 Simple Steps

According to DEBTSteps.com, envelope budgeting or envelope system is a popular way of maintaining a budget. It starts by storing the cash into separate categories of household expenses that are allocated in separate envelopes.

1. TRACK YOUR LAST MONTH’S SPENDING PATTERNS

One of the first steps that you have to take is to analyze your spending patterns, variable expenses and fixed expenses (i.e., monthly electric bills).

Fixed expenses remain the same every month (e.g. Hand Phone Plan, or HDB Rent). Variable expenses include food, entertainment, clothing, and other expenses that may change every month or year. The challenge now is for you to choose on which expenses you can reduce.

2. DEVISE A BUDGET PLAN

Recording all your expenses, no matter how big or small they may be, can help you plan your budget wisely. Categorize your expenses 7 or more sections such as Rent, Utilities, Electricity, Groceries, Gas, Entertainment, Savings, Loan, Childcare, Tax, Travel, etc.

For example if you are Fresh graduate living in your parents’ house and you earn S$1600 a month. Allocate your money with the fixed expenses first.
Rent- S$700

Utilities- S$150

Electricity- S$80

Student loan- S$100

Fixed Expenses Total: S$ 1,080

Then your variable expenses…

Savings- S$170 (transfer it to your bank account)

Groceries- S$100

Travel- S$100

Entertainment-S$100

Emergency- S$50

Variable Expenses Total: S$520

3. PUT YOUR INCOME IN SEPARATE ENVELOPES

Image Credits: wikihow.com/Do-Envelope-Budgeting

Use your marker to assign each category to each envelope. Use whatever size is best for you. It shall be able to fit easily in your purse or wallet. Follow the budget plan and allocate your money accurately. Spend only from the designated envelope and stop spending once you’ve emptied it. This practice of discipline will help you save a great deal of money.

Watch this simple video tutorial of the envelope budgeting or envelope system by NCNBlog:

1. Start by Tracking Your Expenses

2. Create a Budget

3. Monitor Your Spending

a) Mint

b) You Need A Budget

c) BillMinder

4. Adjust Your Budget

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