Last week, we began our January series on preparing your finances for 2019. As part of our first article we released a worksheet to evaluate your life circumstances and determine what changes you expect to occur during 2019. This week we’re to launch another tool: our Spending Analysis Worksheet
So how does it work and why should you use it?
If you’re a FloatMe user or follow our blog, you probably are thinking about financial goals for 2019. Our worksheet last week was designed to help you think about what changes might be coming ahead and to help you as you set goals for 2019. However, you can’t set effective goals with understanding where your money is currently going. That’s why we’re releasing our Spending Analysis Worksheet before we help you set those goals.
Finding Opportunities to Save
Our Spending Analysis Worksheet starts by having you gather your recent transaction statements from your bank accounts and credit cards- this will help you see where your funds have been going. Once you have those documents in front of you, our worksheets walks you through categorizing each expense as a “Regular Bill” (expenses that you consider needs, but don’t change monthly like your rent or mortgage), “Needs” (expenses that you consider needs, but change each month like groceries), and “Wants” (expenses that you could live without, like restaurants or Netflix).
Why Use it?
Once you have categorized your expenses you can use that knowledge to help create your budget and set goals for the year. Are you planning to save more for retirement? You now know what expenses are “wants” that you can back on. Are you trying to find ways to save on bills? You can try and find ways to reduce your “Needs” that don’t have a set expense, like saving water. Knowing how much you are spending in a typical month across these three categories helps you identify how much room you have to make positive changes in 2019.
Want to get started? You can download our Spending Analysis Worksheet HERE