It's easy to overspend in Singapore if you aren't careful with your finances. Wherever you walk, you are bound to be near a clothing store or a bubble tea outlet. If you want to be in charge of your finances, the first thing you should do is to track your monthly spending.
Tracking your expenses may sound tedious, but doing it just for a month will already give you a pretty good indication of your spending patterns.
Before you set up a spreadsheet, think about your fixed and variable expenses per month. Fixed expenses include utilities and telco bills, insurance premiums and any current debt you are servicing.
Then you have the variable expenses – these include food and transport expenses which can vary from month-to-month, entertainment expenses, hobbies, groceries and shopping.
The variable expenses are perhaps the ones you want to keep a lookout for since fixed expenses should be fairly stable.
GET.com lists the 3 ways you can track your monthly spending:
1. Collect Receipts
This is a manual way and you need to ensure that you do not lose each and every receipt. You will also need to categorise them properly after you've collected them, preferably on a weekly basis.
We do not recommend this as it is tedious and prone to errors. For example, you may have purchased something on your credit card online and you forgot to add it into your expenses because there wasn't any physical receipt.
2. Use Your Credit Card
You can use your credit card to pay for most of your expenses so that at the end of the month, you will have a well-documented record from your credit card statement.
But be careful not to let the convenience of paying with a credit card encourage you to spend more than you would otherwise spend with cash.
There may also be small purchases such as coffee and eating at the food court which may be more practical to pay with cash. Note these down on your phone's notepad and update your records everyday to ensure accuracy.
3. Money Management Apps
In this day and age, we can trust technologists to come up with every kind of app to serve our human needs! There are a variety of money-management apps that can help you split your expenses up neatly into different categories. They work like a virtual notebook, so you still need to remember to key them in after each purchase. We still think it's better than lugging around a notebook in your bag.
Some of the better-known apps include mint.com, YNAB (You Need A Budget), Expense Manager, Pocket Expense and Spending Tracker.
Local banks have also launched their own money management apps, integrating some of their key banking services within it as well; check out OCBC Bank's Money Insight.
And you are not done yet! After tracking your expenses for a month, it will illuminate which category you spend the most on and whether you are spending excessively on non-essentials.
You can either track for another 1 to 2 months to have a more accurate spending pattern, or get to work on a monthly budget where you allocate a fixed amount to savings and each individual type of expense.
What do you think? Share your comments with us below!
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