This website is supposed to track my business and financial progress.
However, I have been drifting away from my core for the last few months. It’s not right to push the blame to my day job… but I was really burned out from work.
It’s already the start of August. I didn’t want to procrastinate repeatedly and give myself some lame excuses.
The first step that I’m taking is to take an extra step to micro-manage my personal finance.
I have been attempting to track my expenses for the past few years. Unfortunately, it always fails when I take a break in overseas.
Yes, it happens again. If something doesn’t work well, I have to find and remove the impediments and change the way I do it.
So I have decided to use another method to keep track of my dollars.
One alarming thing is that I don’t review the expenses that I have tracked over the years.
What is the point of tracking if nothing is done to make sure you are doing great?
I speak about the envelope system before. From this month onwards, I will adopt this system.
Table of Contents
You Need A Budget
I used to track my expenses through Google Sheets.
It worked well as I was a student. There were fewer complications in my income and expenses.
When I started working full-time, I have to upgrade my excel sheet to cover things like the bonus, investment and business income.
As the list gets longer, it’s getting harder to track with an excel sheet. I moved to a couple of apps and decided on Wallet (Android). It’s not bad but it doesn’t do budgeting very well.
I came across YNAB a few years ago (YNAB4, I guess?). I really like the concept but it was very expensive (for a student). Since I can afford now, I want to try if this app is really what I need.
My YNAB Categories
If you are as anal as me, you might find it very difficult to create the ‘perfect’ categories.
The idea is to make sure all the dollars work. If your take-home pay is $5,000, you want to make sure that every single dollar is put into an envelope.
It may or may not work for you but these are the categories that I have refined over many years. Here you go:
- Restaurants ($400) – We tend to indulge in some good food once or twice a week.
- Fast Food ($50) – We avoid eating fast food unless it’s necessary. Most likely, this category will roll over to the next month or add-on to other eating out fund.
- Hawker/Food Court ($100) – I tend to opt for something cheaper for my weekday lunch. This should be comfortable enough to cover the work days.
- Groceries/Snacks/Drinks ($50) – This covers all other food consumptions.
- Taxi/Grab ($100) – Sometimes we might need to buy some extra time.
- Bus/MRT ($75) – Daily commutes
- Clothes ($25) – I don’t purchase new clothes every month but I have the tenancy to purchase in bulk. This acts as my future fund.
- Hair Cut (S$50) – Grooming is important for professionals.
- Medical (S$100) – This includes medicines that I need to purchase off-the-shelves.
- Others (S$100) – Just in case something happens
- Income Tax (Sensitive :p) – Meh.
- Insurance (Sensitive too :p) – I pay my insurance annually but I budget the amount monthly so it’s easy to track.
- Utilities (S$271) – Internet, cable tv, phone bill and home utility fees.
- Spotify (S$15) – Yup.
- Netflix (S$17) – I shared this account with my friend so I’m only paying a fraction. We will probably end the subscription in December.
- Gathering/Friend’s Weddings (S$200) – Yeah I have a fund for friend’s weddings so I won’t get a shock.
- Concert (S$100) – We like to go concert 🙂
- Movie (S$50) – We hardly watch movies now… so I suspect this will roll over every month.
- Game (S$100) – This is our main entertainment source now!
- Partner (Sensitive :p) – Birthdays, Christmas etc
- New Phone (S$50) – I’m planning to get a new phone in 2019. Good to save earlier right?
Savings & Investment
- Emergency Funds – This is my rainy day savings 🙂
- Investment – I do some monthly investments because it’s better than putting in the bank.
- Website Investment – For me to purchase domain names and websites for future investment
You may have a different way to categorize your budget. Do let me know and we can discuss in the comments section!
Initial Steps with YNAB
When you start using YNAB, it looks very overwhelming. Here are the things that I have done:
- Setup all my budgeting accounts (money that I’m using every month)
- Setup all my tracking accounts (non-budgeting accounts)
- Setup all the categories
- Fill up the budget amount
I have paid my credit card bills before I added my budgeting accounts. This helps to make sure I ‘restarted’ my budget from zero so that I don’t have to transfer funds from one account to another.
If you don’t want to do the same, you can fill up your credit card bills and budget the exact amount to pay off the bills in the budgeted column.
At the start of every month, I will update this blog with my monthly expenses. I will track if there is a need to adjust my budgeted amount for each category.
I hope this can last for a year so that I can better judge my spending habits.
Let’s rock and roll!