One of the most things we manage every day is money. There're a lot of reasons for this, the mains can be:
- Food
- Health care
- House
- Family
- Car/s
- Travel
- Communications
- Spare time
Every day I see a lot of people that have several problems to keep their personal balance in active. The funny thing is that very often the salary of this people is not low.A lot of them that say:"I take care about the expenses bla bla bla..." but all of them don't know where their money goes.
As I said in the title the main problem today is not to do money but to save money.
For the first aspect there're a lot of ways and all of them depending by us: for the ones that at this point are disappointed because they can not do money I cite two of my best father phrases:
- "If someone really want to work then he/she will work."
- "In this world no one gives you anything"
I don't want to disrespect the ones that can not work due to critical aspects: my words are for the ones that can have the possibility to work.
Maybe I'll write some posts about the first aspect, but now I want to focus your attention on the second aspect: to save money.
Very often we change our lifestyle when we're in a not good period: it's a natural aspect of auto adapting of the man. The goal of this post is: before drastically changing your lifestyle, concentrate your attention where you spend your money.
If we knows where we spend money we can correct only a few aspects of our life. I assure you that it's very simple to lose money in not relevant things.
In order to start saving money, we are obliged to track our expenses. We can do it by several ways:
- by hand compiling a "personal" diary
- by computer using a software money manager
- by web if the bank supports a good personal balancing page
- by computer using a spreadsheet
The third method can be interesting only if the online banking account has all the details useful for analyzing the unnecessary expenses.
The fourth method is interesting but if we need to do queries about our expenses list it can be limited unless we are able to write VBA macros: I'll write some post in the future about this.
The second method is the one I suggest but we should have a good SW solution for this. The most famous are:
- Microsoft Money (not free/shareware)
- GnuCash (open source)
- AceMoney Lite (freeware)
- Homebank
GnuCash is more powerful but it's a bit complex and it's not immediate. For this post I suggest the one I'm using for more than a year: Ace Money Lite.
I'll not do a review about this SW (maybe in the future) but I will report the screenshots in order to better explain the concepts.
As said before we need to track our expenses: to do it it's highly suggested to use digital payments. A honest bank should give to you the possibility to have an online management of the account and the credit cards so we need to download the transactions, relative comments and have a result like this:
The most important feature that a good money SW should have is the capability to generate reports. In particular we need a simple report that shows the monthly expenses grouped for categories, something like this:
The column Average is very very important because it tell us the mean expenses that we do during a month but calculated between the period of analysis (one year in the example): this is the main information for saving money because we can find where we spend money and also the impact of a single big expense during a period (I suggest one year).
Very often we thing that we do not spend a lot of money during a month but we can not realize why we can not save money: the reason is that very often there's a single o limited big expenses during the year that shall be absorbed during the months of the year; good examples can be subdivided in periodic and occasional:
Periodic:
I'll not do a review about this SW (maybe in the future) but I will report the screenshots in order to better explain the concepts.
As said before we need to track our expenses: to do it it's highly suggested to use digital payments. A honest bank should give to you the possibility to have an online management of the account and the credit cards so we need to download the transactions, relative comments and have a result like this:
 |
| Fig. 1: Transactions list |
The most important feature that a good money SW should have is the capability to generate reports. In particular we need a simple report that shows the monthly expenses grouped for categories, something like this:
 |
| Fig. 2: Monthly spending by categories |
Very often we thing that we do not spend a lot of money during a month but we can not realize why we can not save money: the reason is that very often there's a single o limited big expenses during the year that shall be absorbed during the months of the year; good examples can be subdivided in periodic and occasional:
Periodic:
- the assurance of the car/house
- the car periodic maintenance (tires, mechanic, etc.)
- the buying of a new high cost gadget (tablet, smartphone etc.)
- a new bike
- a new washing machine
- a new fridge
Once we have located the critical category we can now take countermeasures in order to lower the monthly expense.
Very very very... and very often we think that we can afford that thing but it's not so true as we expect it: the reason is that our brain easily evaluate an expense only if within few months, not for a longer period because can not remember all the year expenses.
So how can we lower the expenses?
Acemoney helps us for this because if we double-click on a category in the report at Fig.2, we can have the detail of what has generated that total.
For example regarding the cellphone expenses we have the following situation:
As we can see in the example, before August the mean expense for cell phone calls is ~30€/month: too much! So a countermeasure can be to change operator and tariff plan. After this operation we lower this category expense by 50%!
Try to find categories where you can make the same! I am sure that you will save a considerable amount of money.
See ya!
Very very very... and very often we think that we can afford that thing but it's not so true as we expect it: the reason is that our brain easily evaluate an expense only if within few months, not for a longer period because can not remember all the year expenses.
So how can we lower the expenses?
Acemoney helps us for this because if we double-click on a category in the report at Fig.2, we can have the detail of what has generated that total.
For example regarding the cellphone expenses we have the following situation:
As we can see in the example, before August the mean expense for cell phone calls is ~30€/month: too much! So a countermeasure can be to change operator and tariff plan. After this operation we lower this category expense by 50%!
Try to find categories where you can make the same! I am sure that you will save a considerable amount of money.
See ya!
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