How to create a fixed expense statement?
At the end of your salary, do you always have a chunk of the month left over? Would you like to save, but fail time and again? Then it’s time to do a financial review. This will help you get a grip on your finances and understand your spending habits. But, creating a financial statement, how do you do it?
How to create a fixed expense statement?
It is not difficult to gain insight into your finances and make a list of your fixed expenses. You do this in three simple steps:
- Mapping your situation
- Determine what you want to achieve
- Create and maintain a financial overview (short- and long-term)
Mapping your situation
The first step is immediately not the very best. After all, a financial overview begins with understanding your current situation. What do you spend your money on? How much comes in monthly? And what amount can you save per month? Only when you can answer such questions can you further determine what you want to do with your money. So list all your expenses and income, such as in an Excel document. But what are fixed expenses? Consider:
- the rent on your house or your monthly mortgage costs
- gas, water and light
- telephone, tv and internet
- Insurances (such as health, third-party, liability, household, travel, mortality, and legal expenses insurance)
- Annual municipal taxes (ozb, sewerage levy, garbage levy, water board charges)
- subscriptions such as magazines, sports subscriptions, lotteries and so on
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How much are your monthly overhead expenses?
Everyone spends a different amount each month on fixed expenses. We at elfin try to set aside 50% of our monthly income for fixed expenses. 30% we use for other daily items, such as groceries and drugstore stuff. 20% we set aside in our savings and investment account.
Determine what you want to achieve
Then now is the time to think about your financial goals. Maybe you want to have a certain amount in your savings account at the end of the year. For a nice vacation, remodeling your home or as a financial cushion. Divide your goals into short-term and long-term goals so you know which pots are priorities to replenish. In doing so, it is incredibly important that you set realistic goals. Otherwise, you will only be disappointed if it doesn’t work out.
Creating and maintaining a financial statement
With your financial overview, you know better and better how to achieve your goals. Keep your overview and try to critically review it from time to time. Are you still on track? Do you need to make adjustments somewhere? That way, little by little, you can start building your wealth. Here, you choose how much time you spend keeping track of your finances. It’s just what you want for yourself!
Are you also starting to create a financial statement? Give yourself time to put things in order. And before you know it, you’re really working on achieving your goals!
