Good personal finance isn't just about making prudent financial decisions. The tools you use to monitor and manage your finances can help you pay off your debts, keep to a reasonable savings plan, and reach your financial goals.
It's safe to say that managing your personal finances isn't easy. If it was, the global market for products and services related to personal finance wouldn't be over USD 1 billion today. There are, however, several ways that you can help yourself on the path toward better personal finance management for little or no money at all. Below are three of my top tips.
1. Use Spreadsheets
Using a spreadsheet to manage your personal finances is the easiest and most time-efficient way to ensure you're on track to meet your financial goals.
The first step toward gaining financial control and clarity is by creating a space where you can clearly see your income and expenses together. By doing this, it will be easier for you to rearrange your spending in line with your priorities. With software like Excel or Numbers, you can quickly build a simple spreadsheet in minutes.
Granted, this task may not be very enjoyable for some people (for others — like myself — it's almost therapeutic), but the payoff is well worth the time it takes to accurately identify where your money goes.
In my personal spreadsheet, I've categorised my spending into themes, like transport and digital subscriptions, etc. The greater detail you go into identifying your expenses, the easier it is to manage them.
If you need help putting together a custom-made spreadsheet, don't hesitate to contact me.
2. Make a budget (and stick to it!)
Once you've gained a clear view of how you spend your money, you're now in a position to rearrange your finances.
To do this, you must first decide what your financial goals are. Then identify practical steps that will help you achieve those goals. For example, if you want to save more money, you can set up an automatic monthly bank transfer to a savings account once your salary is paid (don't wait until the end of the month to save money!). If you have a stable income, you can organise a concrete savings plan in your spreadsheet over a series of months, adjusting the amounts as necessary.
If your budget is already stretched, and saving doesn't seem feasible, you will need to distinguish between the expenses that are necessary and those that are a luxury. This may mean temporarily stopping your Netflix subscription, or cutting down on impulse buying (I mean, how many new bags, or pairs of shoes do we really need?), finding cheap alternatives for items on your grocery list, or even finding a cheaper phone contract.
Once you've balanced your expenses and savings, the final step is sticking to it. Sticking to a budget can take time, and starting to set money aside is often the hardest part of the process. But with discipline and an appreciation for 'delayed gratification', budgeting and saving are healthy and satisfying habits — and they get easier over time.
3. Get the most out of technology
Today, there exists an abundance of tools and applications to help you monitor your finances and save money in unexpected ways. Most are available directly on your phone.
While I'm convinced that all of your personal finance needs can be sorted with a simple spreadsheet, for the more tech-savvy users, there are a number sophisticated tools you can use to track transactions. Below are a few popular and some lesser known applications available in Switzerland:
Buddy — Instead undertaking the manual task of creating a spreadsheet and keeping it up to date, Buddy will help you gain a clear overview of your spending by streamlining the process to create a budget and calculate your expenses using a simple interface.
Too Good to Go — In Geneva, food is typically a big expense. With Too Good to Go, you can buy food at a discount price from your local store and help stop food wastage at the same time.
TWINT — TWINT allows you to pay with your phone at most stores in Switzerland, send money to other TWINT users, and keep a list of all your transactions, all for free. A lesser-known life hack with TWINT allows you to transfer money to and from your credit/debits cards free of charge, by setting up payments from your cards directly to your bank account.
You can also keep track of your spending by linking your credit/debit card to native phone applications, like Apple Pay.
It's never too late to start!
Sacrificing some comforts for the sake of your financial goals can be painful in the short term, but debt cycles and perpetual rent bills bite harder. You can start to improve your personal finance situation today with a few small steps. Investing time in your personal finances is time well spent and something I'm certain you won't regret.
Still need help?
If you need additional support to improve your personal finance situation, I'll be happy to sit down with you to put together a reasonable budget and strategy. Whether that be paying off a longstanding debt, or methodically saving to get a foot in the real estate market, with a concrete plan, and the right tools, we can get you where you want to be.