Will has been actively saving for a number of years and has decided that he wants to start investing. He’s opted for the real investment route. After analysing his income level, spending, credit score and other key factors, he realises that he has to become more aware of how the various factors affect his real estate investment efforts.
How to go about monitoring and analysing your personal budget and spending:
Embracing technology
Will could rely on spreadsheets to monitor his personal budget or he could embrace technology by using an app. Fortunately for him, there are a wealth of options available. There are apps he can use to automate saving, track his spending and even monitor his use of credit.
Gain insight into spending habits
Using spreadsheets or apps is one thing, but having actual insight into actual spending habits is even more important. This is the difference between just gathering the information and actually using it to change financial behaviour. Once Will has monitored his spending, he then has to analyse. This means that he’ll know what he can afford to spend. He can keep track of his actual spending. By being honest with himself about exactly how much he’s spending he can make changes which will benefit him in the long run.
Embrace the importance of budgeting
A budget is a useful tool that simply shows how much money you have coming in and how you’re spending it. Part of creating a budget means listing all of your monthly income sources along with all of your expenses. If you’re spending R200 a week on coffee, even though you estimate that it’s more like R120, a budget will show you the facts in black and white. Once you have a budget you need to start by setting goals. This includes prioritising how you pay your bills and automating saving.
Monitoring and analysing your personal budget and spending gives you an honest look into what you can do in order to achieve your goals. By making the necessary changes, you can reach your targets faster.
