Now that June has ended, I would like to share my first Spending Report with YNAB. It has been a breeze using YNAB for the past month and I now believe it is one of best budgeting/expenses-tracking software out there. However it is usually the hefty price tag that set people off from even trying it.
Nonetheless, the chart below shows the total spending, in percentage, according to the categories I had set before the start of the budgeting month. I had learnt a lot on my spending habits that I would never have noticed before, including how little purchases of $3-4 tidbits and drinks every other day from the corner shop while on the way home could amount to near $60 in a single month.
So the main take away for this will be to minimize all expenses that are in both the categories of the Consumables and the Wants. Focusing on this will efficiently improve your lifestyle while boosting your savings at the same time.
Instead of cutting down your daily lunch budget with your colleagues, walk to the MRT Station to save the bus fare, or rejecting your best friends on Friday nights so you would not be spending even more, the only things you need to cut down are the expenses stated above.
Consumables are products/services, luxury or not, that comes up destroyed, dissipated, wasted, or spent at the end of the day. Some products include food, automobile gas, movies, etc. Some services include massage, dry cleaning, etc. As The Independent Abecedarian believes that most of the consumables are very much subjective and compulsory to some people, it is still wise to revise your consumables (either reduce or eliminate), especially if they are mostly a daily product/services. This will rollover and by that, expect a big sum of savings. A good tip to judge if what you are spending is a consumable is to check if this product/service is typically included from warranty policies since covering consumables with warranty excessively increase the cost of the premium, most of them do not.
On the other hand, wants are products/services that one would like to have. This is usually unnecessary to sustain your current lifestyle. It might add-value but will never be required for you to survive. This category should always be revised and minimized if possible as they usually and increasingly end up being a large part of your budget if not trimmed occasionally. Wants include Television subscriptions, newspaper subscriptions, online games subscriptions or latest gadgets, etc. Try harder in finding ways to reduce or even eliminate them- Watch uploaded shows online, Lend DVDs from friends/relatives, Read news online, Play alternative games that are free-to-play, etc.
Lastly, although I believe that this post is highly debatable, it is still up to one if he/she is willing to trim down his/her expenses towards a much quicker Financial Independent Minimalist.
The Independent Abecedarian
It’s either you dream big, or nothing!
Recommended read-up of the day:
11 Ways Budgeting Can Improve Your Life (est 3 minutes)
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