Wednesday, June 04, 2014
I've been using YNAB, a software that allows me to track expenses and all my cashflow in different accounts with great precision and accuracy, since Aug 2013. Almost a year now. It works very good for me because there's so many times that I've missed out on something and I didn't know about it until the end of the month when I did my month-end accounting and found out that things don't add up. I'm very sure I would have missed these errors if I persisted in using my spreadsheet way of tracking expenses. I'll still highly recommend it to anyone who is serious about budgeting and tracking expenses. Don't buy it now though...wait for a great offer to come (at Steam, that online platform to get games), which is a matter of when and not if.
Thought I'll do a half year update how my savings percentage is like, given the new found accuracy. In the past, my spending is relatively low. I'm not truly independent yet and a lot of expenses are paid for by my parents. Though I gave them allowance to offset some of this, I'm quite sure it's not enough. Why? I don't have to pay for rental (for a room). I don't have to pay for my own breakfast and dinner. If there's a problem with some household items, I'm not the one paying. When the toiletries are almost finished, it'll magically refill and appear. In short, a lot of expenses are paid for by others. Hence, it's hardly a miracle to have my savings percentage (relative to income, of course) at 70 to 80%. Of course, I always know it's not going to be realistic going forward.
After a few financial bombs that nearly wiped out all my savings, I got myself married, bought a resale flat, paying for a pre-owned car and started paying for things I never had to pay for in the past. Nobody is paying for me now, as it should be. Everything in, my year to date savings percentage hovers at 47%. (If you're not self employed like me, don't compare - I don't contribute to cpf. So, if you include your CPF contribution as well as your employer's contribution, in addition to your own savings from your take home pay, you'll probably beat me or even out.) This statistic is not going to be useful until I finished year 2014 and tabulated everything, because there is just too much variability in my income stream and also my expenditure patterns. There's some big ticket items in the second half of year 2014 that occurs annually (like insurance premium, road tax etc) so it might lower down my savings percentage. On the other hand, my peak season occurring around Aug to Oct might boost my income too.
Going forward, I'll try to keep my savings percentage at around 50%. It can be higher but not lower. I already shared my monthly expenses - everything in, it's about 3.5k per month. Hence, it's very clear to me that my income better be more than 7k to have that kind of savings percentage. In fact, during my peak months, it better be much more than 7k so that it can even out those drier months. Life's a bitch when your pay resets (though not necessarily to zero) every year and you have to work hard to reach the same pay as before, and work even harder if you want to earn more than the year before. No complains here - I chose this myself.
My savings target of 30 to 40k seems right on track. Savings percentage is a tad lower than projected, but still alright. Will have to see it again at the end of year 2014. So far so good.