Originally posted on January 11, 2019
Last week, we began our January series on preparing your finances for 2019. As part of our first article, we released a worksheet to help you to evaluate your life circumstances and determine what changes you expect during 2019.
This week, we’re launching another tool: our spending analysis worksheet. So how does it work and why should you use it?
If you’re a FloatMe user or you follow our blog, you’re probably thinking about your financial goals for 2019. Last week’s worksheet was designed to help you to think about the changes that might be coming and to help you as you set goals for 2019.
However, you can’t set effective goals without understanding where your money is going. That’s why we’re releasing our spending analysis worksheet so that you can gain this vital understanding before 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 to see where your funds have been going.
Once you have those documents in front of you, our worksheets help you to categorize each expense:
- Regular bills: Expenses that you consider needs but which don’t change monthly, like your rent or mortgage.
- Needs: Expenses that you consider needs but which change each month, like groceries.
- Wants: Expenses that you could live without, like restaurants or Netflix.
Why Use it?
Once you’ve categorized your expenses, you can use that knowledge to create your budget and to set goals for the year. Planning to save more for retirement? Now you know which expenses are “wants” that you can cut back on. Trying to find ways to save on bills? Now you can reduce “needs” that don’t have a set expense, like saving water.
Knowing how much you’re spending across these three categories helps you to identify how much room you have to make positive changes in 2019.
Ready to get started? Download our spending analysis worksheet here.