Spring comes with spring cleaning. However? It applies to your home, but also your money matters. Do you want to get a clear picture of whether you can save money and have it completely clear how much money you can put aside? Then make a good overview of your income and expenses, especially using our eight tips.
Overview of income and expenses: this man has it all
First, list your income
Make a list of all your income. Do this digitally – for example, in Excel – to save it and save it for later. You naturally start by noting your wages, benefits, or pension. Allowances and regulations such as child benefits are also included in the list. Do you get holiday pay and a 13th month? You also put that in your overview. Note immediately whether it concerns one-off or, for example, monthly income.
Next, map out your fixed costs
You create a list with all your fixed costs in the same file. It includes all recurring expenses you must meet because you have entered a contract. Think of your rent or mortgage payments, the energy bill, insurance, subscriptions, and the municipal assessment. Please note that fixed costs do not necessarily all recur monthly. Therefore, note how often you must deal with these expenses.
Divide your other expenses into categories
In addition to the fixed costs, you also must deal with daily or ‘household’ expenses. Write precisely what you spent on this in the past month and the month before. Think of groceries, transport, and the drugstore. It might be a long list if you jot down each message separately. That’s why it’s helpful to divide the list into categories and note your spending on each type.
Nibbed also makes a distinction between household expenditure and reservation expenditure. Reservation expenses do not necessarily recur monthly but regularly. This includes clothing, shoes, furniture, electrical appliances, and holidays. You also write down all these kinds of expenses in categories.
Make your budget for the average month
We said it before: some income and expenses come back monthly, others every quarter or six months. That is why it is wise to make an average monthly budget. You then convert all income and expenses in a year into an average monthly amount. By the way, make sure that you do not count amounts twice.
See if you can save money
Is your budget ready? Then you can see if and where you have room to make changes to your expenses. You may be able to reduce your fixed costs by, for example, canceling subscriptions or taking out cheaper insurance. Good to check this at least once every six months!
Also, check what you spend money on every day. Do you feel good about that, or would you instead save on some expenses? Our 11 tips to save money are for you in the latter case.
Set your savings goals
Do you have money left if you deduct your expenses from your income? Determine how much you will save each month and – not unimportantly – what your savings goals are. Saving is more effortless if you know exactly what you are doing it for. Start with that if you don’t have a pot for irregular expenses. Such a buffer ensures that you will not be faced with surprises.
If you do not need money for a more extended period, consider alternatives to saving, such as investing. With this, you run the risk, but you also have the chance to achieve a higher return.
Automate with an online housekeeping book
If you are starting to make an overview, manually noting everything down can help your awareness. Programs such as Excel or Google Sheets are beneficial for this. However, plenty of online household books also take the work off your hands. This way, you can see exactly what you spend and on what, all year round, without writing everything down.
If you have a Knob checking account, you automatically have an overview of your income and expenses. The Digital Cash Book is linked to your account by default. You can easily add your credits and debits at other banks via an upload. You get a wholly categorized overview of all your banking matters.
Plan a little further ahead