How I took control of my personal finances. A simple walkthrough for you.

So, the New Year has come. Like every January, we all make tons of resolutions. Some of us want to get fit, some of us want to spend more time with family and some of us want to bring their personal finances into balance. Like every year, we struggle and often fail to keep this resolution.

2015 was a fabulous year for me. That was the year I finally managed to keep most of my resolutions. I’ve started working out, got married and founded my own design studio. Last but not least I finally managed to take control over my finances.

This last thing is one I’m the proudest of. I found it to be crucial if you want to move further and take control over your life.

We live in the age of consumerism and there are temptations waiting on every corner.

We often don’t even realize how much money we waste just because we don’t analyze our expenses. Believe me, you may be surprised how much money you spent on mobile games or alcoholic drinks.

These are the money you can save and use them as your safety cushion, invest capital or to pay your debts and live a stressless life.

The struggle

Like most of us, I panic when I hear about home budget planning. I’m a creative person, math and finance were never my strengths. Hell, I bet many of you tried this before and failed. We all have our excuses: It’s complicated, time-consuming and the results are poor.

I’m a busy person. When it comes to personal finances I need a tool that is fast and simple.

You know what? I agree. I’ve tried many different solutions before: smartphone apps, Excel, web applications, pen and paper. This hasn’t worked for me. At this point, I’ve realized that this “classical” budget-planning-centered approach won’t work for me. I didn’t have time to spend evenings with pen and paper or Excel tables.

The apps that were supposed to help me with my finances only got me confused. Not to point the registration forms even before I got to the real app or tons of dummy data at the start.
 

The apps that were supposed to help me with my finances only got me confused. Not to point the registration forms even before I got to the real app or tons of dummy data at the start.

 
Try to find the way in a maze made of ovecomplicated tools…

The most home budget apps I’ve found attacked me with an overload of functionalities. In the end, I rarely got through welcome screen.

The solution

I’m not a financial guru, but I’ve managed to collect some knowledge and create the system that works for me. And believe me, If I was able to keep it, all of you are.

I have to admit that understanding your spending patterns is essential to keep personal finances healthy. The majority of experts say that it is the first step. We’ll come back to the next step later, right now, let’s focus on this one.

Understanding your spending patterns is essential to keep personal finances healthy

As I told you before, I was terrible wit keeping track of my expenses. So I’ve decided to simplify everything.

 
Simplicity is the key. Photo credit: https://pixabay.com/en/stones-pebbles-stack-pile-zen-801756/

The biggest mistake we all make is overcomplicating things. I’ve tried to keep accurate track of my expenses with dozens of categories and side notes. It was too much.

The fun fact is that almost 95% of our expenses can be grouped into just seven categories.

I’ve made a quick research and found out that majority of my spendings can be assigned into one of seven categories:

  • Bills
  • Transport
  • Food
  • Entertainment
  • Clothes
  • Health
  • Alcohol & tobacco

You can probably make this work with 5 or 6 but I wanted to check how much money do I waste on eg having drinks in the town.

Keeping track of my expenses became a lot easier in a blink of an eye. It was the first step. I still had a problem with collecting bills and taking some time at the evening to write everything down. I realized that the solution is to do this instantly. I mean, I go o the grocery and buy a bread. I instantly write it down. It takes only a minute to write down one position and a lot more time and determination to write down 10 things in the evening.

I’ve finally managed to keep track of my spendings. It was the first step.

The Next Step

Here’s where “my system goes left”. A majority of tools made for personal finance control is built around the concept of budget planning. I mean, you keep track of your spendings, analyze them and try to plan a budget for the next month. And there’s where it becomes really complicated. Planning a budget is time-consuming, and, in the end, not so easy task for most of us.

I’m a huge fan of planning. I always have my tasks written down. But when it comes to finances I believe, that you can do well without an overcomplicated budget.

I believe that a simple analysis of your expenses can help you save 80% of the money you’d waste. 80/20 principle. If you don’t have few hours monthly to plan everything, it’s still better to save 80% than 0%. After some time, you can make it even 90.

So, what should you do? I’ll tell you what I’ve done. I looked through my expenses and realized that I’ve spent a lot of money on entertainment. Wait. When? I barely play any video games nowadays, I went to the movies only once. Oh, wait, how come I spend so much money on clothes? I’ve only bought a few cheap things?

Get it? I’ve taken a while to think about it and realized that I’ve been spending small amounts of money at a time, but when added together, it was some real money. I’m really curious, what your Achilles heel is?

 
Save money. Step by step.

I’m sure I’ve wasted less money just because I had to write it down every time. It made me think if I really need this before buying.

Next month I tried to give more attention to my spendings on clothes, mobile games, or snacks (which I was eating while on the run. Turns out I’ve spent a lot of money on them and all I got in exchange was fat).

Taking it to the next level

The system was right but I didn’t have a right tool. As I said before I’m not a fan of the personal finance apps out in the App Store, so I’ve been using Evernote for taking notes about my expenses. It wasn’t too comfortable.

I’m a designer so I’ve decided to design a tool that would be a perfect match for my needs. I’ve made a quick web-based prototype and got it on my phone. I’ve been using it for more than half a year now and I believe it’s about time to tell people about it.

Say hello to Blinq

The Blinq is a result of many months of real life research and design iterations. My goal was to design an app that will help me record my expenses as quick as possible. In a blink f an eye (average berson blinks every 5 seconds).

 
Blinq 0.9

Blinq helps you keep track of your expenses in a blink of an eye. Thanks to its intuitive UI design and Apple Watch companion app you’re able to save an expense in literally 5 seconds. You can stick to 7 predefined spending categories or create your own.

You can also add budget limits for specific categories. Let’s say you don’t want to spend more than $50 on clothes. Blinq will send you a notification if you’ll be closing on this amount. It’ll also mark it as red or yellow in the app UI.

It’ll also help you analyze your spending patterns and take a full control over your financial life.

Blinq is currently on the final straight before going live. We’re finishing the development process as you read this. You can get to know more details by visiting Blinq website here.

Few final thoughts and tips

I know that this article is not a rocket since but I believe that we often need someone to help us realize obvious things.

I really hope that at least few of us will benefit from reading this piece. It doesn’t really matter if you’ll use any web app, excel or pen and paper as long as you’ll be comfortable with it and keep writing down your expenses. I strongly believe that our own Blinq is a tool that’s worth taking a look at, but it’s only your call if you click here to get to know its features.

Article by Tom Koszyk culled from medium.com. View original article here

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