Observation and Filling in our Database (Your Finances under Your Control)

Now that we have identified our motivation, we are ready to start our journey toward Financial Optimisation. Our next task is to observe our buying habits and to fill in our database.

How can we do it?

Firstly, we have prepared for you an Excel template, which you can find HERE. It is a generic form, which you can modify on your own, depending on your personal spending preferences and needs (maybe you have no kids, but there are pets in the picture; or you have to add in public transportation costs instead of car). Please feel free to download the template and make it your own. Add lines, delete lines, change colours, it is really all up to you.

Secondly, there are two main methods to gather your data:

  1. If you use credit/debit card for your purchases, you can use your card statement which you receive on a monthly basis and go through it line by line, putting each purchase into a different category. Some software (as Personal Capital) might do the job for you if you want to automatise the process a step further.
  2. If you use predominantly cash, it would be good to keep a digital or good old pen-and-paper journal of all your purchases. At the end of the month (or more frequently if that suits you better), you can categorise the expenses and put them into the respective lines on your template.

This is a Judgment Free Zone

We will not judge your spending habits, please be so kind and do the same. You are doing this exercise to observe how you are handling your finances at the moment. Going further, we will go into the opportunities to optimize these finances, but at this particular point you should just concentrate on filling in your database with numbers.

Why do we need to do this?

For each good analysis we need a stable basis. In order to optimize our finances, we need to track where each Euro/lev is going right now. According to Peter Drucker, If you can measure it, you can improve it, and this is precisely what we are trying to do here – let’s help each other improve our financial position by observing our handling of finances and nonjudgmentally getting to know which categories consume the highest part of our budget.

Later on the information we are gathering now will be of tremendous value as we will go through each category and see how we can optimise our spending.

At the Danubers’ Household

We are handling our purchases through a combination of debit cards, Ticket restaurant cards (food vouchers) and very limited cash transactions. At the end of each month we receive our card statements and we put each purchase into the respective category, this way we know very well where the money went. The cash items are noted down in a separate file filled in every time we spend cash and then added to the Finances file again at the end of the month. So far this process has been working pretty successfully with us and it takes us about 30 minutes per month.

How are you handling the tracking of your spending? Any advice you would like to share with us?

Links to the posts of the series Your Finance under Your Control

0. Getting Started

1. Observation and Filling in our Database

2. Reflection and Checking in with Our Priorities

Good luck!


Mrs. DNB

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