Now that reports are here, (yay!) we want to help you get the most out of them. Sure, they are pretty to look at, but more importantly, all that glorious data can help you make more informed, meaningful decisions. Better decisions lead to better budgeting and more control. This is definitely a more is more situation!
But first a warning: resist the urge to get too upset by the past. It’s done—that money is gone, you can’t get it back—but you can use all the information to improve. Here’s how to get the most out of reports, as explained by John, a quirky but lovable (albeit fictional) character, who has been (fictionally) budgeting for about a year:
In June, John still had a few credit cards to pay off, but he was pretty focused on paying down that debt over the summer. Looking at June through September will show his focused progress.
Here, John can see the big picture impact of his decreasing debt and increasing assets. Way to go, John!
John has been making slow and steady progress which sure adds up! John’s Net Worth has been increasing every month and by 46% overall! Wow!
John can look back and see his assets in June compared to September. His progress felt slow as it was happening, but from this vantage point, he is feeling like a financial wizard!
From less than $1,000 in June to nearly $6,000, in just four months. Go, John, go!
It’s encouraging to see his progress and John is reminded that he needs to stay the course. This budgeting thing works!
John is excited to dig in further. So much to learn!
Income and Expense Report
His progress between July and August seems out of place, but he can drill down to get the details.
His income was pretty much the same.
And his spending…..
His spending was not the same. What happened John? Looks like a big jump in true expenses. From $100 to $1465.52.
Ah, yes. The data reminds John that he had a big car repair and an unexpected vet bill in August. He had to shuffle some money around to cover those expenses. That’s our John, always rolling with the punches!
Digging into the details will help keep John honest. He’ll need to budget more aggressively to rebuild his Auto Maintenance and Veterinary Expenses categories. He could even set some goals to keep him on track.
Using this information will help make John’s budget more predictable.
John has learned that setting a little bit aside every month is way easier than stressing out and having to scramble at the last minute. This information helps make my budget more predictable. It’s far better to set a little bit aside for things each month than to have to scramble to cover at the last minute. So true, John, so true.
John could also look at his spending trends during this same period of time. The biggest culprits? Groceries and Dining Out! You and me both, John!
Now that he is staring at the numbers, John remembers feeling like he was shuffling money around more than usual. But it was hard to get a sense of the change until he could see it in black and white, er, orange and yellow.
It’s a pretty clear pattern. The more John eats out, the more he spends on food overall. Happens to the best of us, John!
John can go one step further, and examine the Dining Out category (by clicking on that part of the bar graph).
Things are looking worse for John! Looks like the occasional coffee and donut run wasn’t so occasional after all!
But John had been intentional about cutting back on the donuts in August and September, and it didn’t decrease his spending at all. Hmmm,…
Looks like John just traded donuts for pizza and cheeseburgers! Oh, John!
What a wake-up call! John has to be realistic about his eating out. Budgeting nothing to eat out isn’t going to work. And when his budget is too unrealistic, he’s tempted to throw in the towel.
But John can look at his averages and have a very realistic number to work with. The averages don’t lie—good work, John!
John is still an eternal optimist, and he still wants to cut back, so he budgets $65/month to start. We all have to start somewhere, John!
John can also compare what he spent on eating out vs. groceries.
Now John is aware that eating out really increases the total he spends on food. If he still wants to decrease that number, he can focus on eating in more and see how that impacts the bottom line. Can’t wait to see what you find out, John!
The More You Know
Data isn’t everything, but it can be incredibly helpful in identifying behaviors, naming priorities, and targeting areas to save more. Reports can help you increase awareness and laser in on exactly what your money is doing, what you want it to be doing, and how to keep the two lined up as closely as possible! Just like John!