199. John's Budgeting 101 Series #7: Analysis Time (Look and See)


After capturing current income sources and current expenditures religiously for the past few months, it is time to start looking at what has been happening.


Income: Generally, this will not change that much from month to month. Every month if you are employed, you should have a fixed amount coming in at roughly the same time/date monthly. If you have savings, FDs, Bonds, you should see amounts coming into your monthly bank statements as well. If you hold equity / shares, you should be getting certain dividends coming in every few months of the year. If you have rental properties, rental income should be monthly. You'll need to be keeping track for about 6 months of data before you can see all types of income coming in.


Using your Excel spreadsheet, you can calculate how much return is each investment making you, per month, per year, per quarter, etc. Are you happy with the diversity of income streams? Don't worry about the amounts for now, just get a feel of the range of variety that can be achieved, and which types of return are you most familiar with, which ones you are uncomfortable with, what else you are curious to try, etc. Don't make any decisions for now, just take notes.


Expenses: after a few months you should be able to see a trend in terms of what you spend every month, quarter, half year, and annually. Which ones are fixed? Which ones are essentials? For essentials, what are you spending on exactly? Too much? Are there more value-for-money alternatives? If yes, is it worth switching? For non essentials, did you spend too much? Are they all absolutely necessary? What can you do without and what can you find suitable more reasonable alternatives? Jot down your thoughts, your ideas, but don't make decisions just yet. Collect more data and do more research first.

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