Saturday, 10 August 2019

Budgeting: Why I refuse to spend >30min per month to track expenses

  Posted at  August 10, 2019 3 comments



First of all, wishing all fellow Singaporeans and investors a Happy National Day and long weekend holidays!

This long weekend is a welcomed one for me as I am finally able to get some much needed rest and re-calibrate my own investing journey after embarking on a new employment. Now, one of the things I do every month during my payday (or the weekend of that week) is to do a quick budgeting for the next month.

A Budgeting Problem: Tracking Expenses
One question I constantly get from friends and readers is: How do you keep track of expenses?

I'm sure most of us have tried some form of tool for tracking expenses one way or another. But many of us give up because it becomes a very tedious thing to do. Just watch the picture below (you might have done something similar before):

What??? I have to key in every single expense... omg.
The animated GIF image speaks for itself why most expense trackers fail for me. As humans, we are creatures of habit and when you have a 1,001 transactions, such an expense tracker becomes far too tedious:

- You can miss out some transactions
- You will forget some transactions if you do not key it in immediately
- You have to religiously and be very disciplined to key in ALL your transactions.

This is humanly quite impossible to keep up for most people and this is why after a few days, weeks or months we will eventually give up tracking our expenses. Expense app trackers are NOT the best solution.

My Solution: Use a spreadsheet and copy+paste my Bank Transaction Statement each month. 
I encountered a lot of issues initially to budget well because I couldn't keep track of my expenses. Therefore I could not know how much I spend for each category of my expenses and there was no baseline or trending I can spot.

The problem led me to explore the fastest way I can keep track of my expenses and the solution was to simply copy my bank account statement for a specific timeframe (usually the period between each payday is used). This allows me to track my expenses and budget in a matter of less than 30 minutes typically.

A sample copy of my Budgeting/Saving Spreadsheet is available at this link (Make a copy):

https://docs.google.com/spreadsheets/d/1WqjlVN2dUlHYoulqqWJsTdrb7pi1BfcbwH0p4N5FJcI/edit#gid=0



Step by step guide how to use the Spreadsheet:

1) Make a copy of the spreadsheet:
Go to File -> select Make a copy (otherwise the file cannot be edited and will be "view only")


2) Go to your bank account (spending account) and select the timeframe
For me, I use a POSB account as my spending account. I will select the transaction history to give me all my transactions for the date range that I want. E.g. My pay day was on the 23rd every month so I select from every 23rd to the 22nd of this month.


3) Copy out all transactions for the spending period
There may be more than one page so you have to copy all the pages' transactions to the spreadsheet.


4) Paste the transactions on these columns in the spreadsheet
These columns have already been customised to mimic how it looks from the bank account. You will need to repeat step 3 and 4 for each page of the transaction history.


5) Click "Sort A-Z" function to quickly re-arrange all transactions 
This will usually group all similar merchants together by alphabetical order, making it easy for you to just simply tabulate them with a calculator on hand.



6) Example set of transactions: Grab
The "Step 2" column is a column used for quick calculations using a simple excel formula. If you are not familiar with it, you may simply use a manual calculator or the windows calculator. After you taken note of the transaction, you can add them to the "Step 3" table in their respective categories. To return to default sorting, just click "sort by date". I usually colour code them to make a visual note that I have already processed the transaction amount so I can tell which ones have not been done.



7) Example set of transactions to categories: Grab (2)
Key in the respective tabulated expenses into a few bulk categories. This will help you to establish a baseline spending you have incurred on each of the respective categories. Most of the instructions are intuitive and you can feel free to adapt the spreadsheet to your liking.



Make your life easier
When you get familiar with this, you will never go back to the tedious expense trackers because it takes far less time to copy + paste all your transactions and simply tabulate them at the end of the month for a mere 30 minutes.

We might not be able to commit and be disciplined enough to make note of every single transaction but most of us can certainly spare 30 minutes in front of our computers on a weekend to tabulate our spending. Furthermore, as we are increasingly going cashless, this method becomes more efficient.

If you have any better methods to keep track of spending or budgeting, do share your personal tips with me and our fellow investors here! Feel free to use the spreadsheet and customise it to your liking. Do give me any feedback if you run into any issues or if this helps you in your savings/investing journey.

Okay. That's one article. See you next time!

Until Next Time,

K.C.
If you like this post, you might like our facebook page as well. I'm also on Investing Note.



Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 

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You don't need to pay anyone/company to have a plan of your own and work towards achieving Financial Independence. Only we alone have no conflict of interest with our own money. "30 Year Old Investor" is a personal blog about a Singaporean's savings and investing journey.


Being the average Singaporean, K.C. is also interested in good food, a little bit of politics and a good slice of humour.

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Disclaimer

Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions.

No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website.

"30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website.

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