3 reliable ways to keep track of personal finances
- First, it is necessary to take into account costs for more efficient business operations.
- Secondly, it prevents various impulsive purchases.
- Thirdly, a few months after the start of accounting, you will be able to track your spending and understand what you can save a lot on.
Have you decided to change your life for the better and start taking into account expenses? Then you need to know what types of expenses are and how to properly account for them.
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Types of expenses
All expenses are divided into two main types – unmanaged and managed.
All expenses are divided into two main types – unmanaged and managed.
The first category includes utility bills, payment for a mortgage or renting an apartment, Internet, various transportation costs (gasoline, travel card). You can also add spending on holidays and birthdays here – most likely, a certain amount during the year will be spent on gifts. It is best to add holiday expenses to the family budget for each month, so you will always have money for gifts, and these expenses will not be unexpected for you.
Unmanaged spending is a category in which there is nothing to cut. If you, for example, try to save money on gas, some days you will be left without a vehicle. All unmanaged expenses must be included in the budget.
It is quite another thing – manageable expenses. This is something you can cut however you like. Managed costs must be specified by categorizing them. For example, if you spent $15,000 on food, and $3 of that was spent on items that you can save on (sweets and other indulgences), limit your purchases for the next month.
Another category on which a sufficient amount of money is spent is entertainment. Do you love going to the cinema? Great, not worth saving on this, but it is better to refuse popcorn, or maybe it is worth attending earlier and cheaper sessions. Do you play sports? Think about whether it is worth spending a lot of money on a fitness club or you can do workouts at home, on your own. Similar expenses are also valued according to this principle.
Method one. Notebook
The classic method of doing home bookkeeping. All expenses here must be written down on paper using a regular notebook or diary. This is the easiest way – you do not need to understand programs and applications, at any time you can get a notebook and write down all the necessary information. Of the minuses – all calculations will have to be done manually, and this takes a lot of time. It will be difficult to maintain statistics – for example, if you need to view data for a certain period.
The essence of the method is to record income and expenses and analyze them. To start accounting, divide a notebook or notebook into three parts – write down income in the first, expenses in the second, and the balance in the third. The column "expenditure" can be additionally divided into the columns "Apartment", "Food", "Clothes", "Entertainment". You can also specify which categories are managed or unmanaged costs. This way you can see clearly where most of the money is going. The data in the last column "Balance" must match the amount of cash you have.
Another option for calculating the budget on paper is to record the indicators of planned and actual expenses. In the first column, write down how much you plan to spend per month, in the second – how much you spent. In each column, write down all income and expenses. Indicate the amount of income and the name of the source (salary, bonus, gift). Do the same with the expense column. At the end of the month, sum up all the indicators, calculate the difference between the two columns. With this option, you can quickly compare expected and actual performance. At the end of the billing period, you will be able to think about what is the best way to save.
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Method two. excel
A convenient way that suits people who have basic skills with the MS Excel editor. In the program, you can independently configure the parameters you need. All calculations will be performed automatically, tables of expenses and income can be divided into categories. You can view statistics for several months, create graphs and charts.
To maintain a budget in Excel, you can use the previous options – the table "Income, expense, balance" or a record of planned and actual indicators. But the capabilities of the program are much wider than those of a regular notepad and pen, so it’s best to use them to the fullest. There are several ways to take into account the budget in Excel:
- Built-in template. Recent versions of Excel have their own personal expense templates. In the 2003 version of the program, select the New – File path, then click New Book in the On My Computer panel. In the 2007 version, in the "Create" tab, click on "Installed Templates". In Excel 2010, follow the path "File" – "New" – "Sample Templates" (at the top of the "Available Templates" panel and select the option you like.
- Uploading a template online. If for some reason the built-in templates do not suit you, you can choose another option on the Internet. You can download it from the official website of Microsoft Office.
- Create a template yourself. Enter column headings, fill in all the required information, create formulas to automatically calculate the entered information (Formulas tab in the top navigation bar).
Method three. Programs and Applications
Many people think that accounting for finances takes a huge amount of time. If you stick to the traditional way of counting, writing down all the information in a notebook – perhaps this is true. However, with the advent of new technologies, keeping records has become much easier. Another way to manage the budget is special programs for accounting finance. All you need to have is a mobile phone or a computer. Here are some programs that will help you always be aware of your financial situation:
- Easy finance. A program with many different features. In it, you can not only keep track of replenishments and expenses, but also set yourself certain goals. At any time, you can view graphs and indicators of your financial performance. The program is available via smartphone and computer. The only drawback of the application is that the free program can only be used online. Also disappointing is the lack of access to many useful features, such as synchronization with other applications and the calendar. To unlock them, you need to buy a subscription (from 69 conditional units per month).
- CoinKeeper. Free application, user-friendly interface, easy and understandable even for a beginner. It is possible to sync your account across multiple devices. This way you can manage the budget together with your family members. Disadvantages – there is no personal account on the site. The app only works on mobile devices. A subscription can be purchased from 22 conditional units per month.
- Drebedengi. Simple and convenient to use. Able to automatically take into account expenses by processing SMS messages from the bank. It has a "Shopping List" function, which can be used when going to the store. To use advanced features (reminders, budget planning, and more), you need to buy a subscription for 549 conventional units per year.
So, what is the best accounting software to choose? Choose the application that is most convenient for you. The only thing you need to do is use it regularly to form the habit of recording your income and expenses.
Financial accounting is an interesting and useful procedure. You will understand this when you analyze your financial situation and see the first results, saving a significant amount after several months of accounting.