At the end of your month, you should have a chunk of salary left. But maybe, like many people, you have a piece of the month left. Would you like to save, but keep failing? Then it’s time to do a financial review. It will help you get a grip on your finances and understand your spending habits. But how do you exactly make a financial statement?
How to make a fixed expense statement?
Gaining insight into your finances and listing your fixed expenses isn’t difficult. You can do it in three simple steps:
- Map your current situation
- Determine your financial goals
- Create and maintain a financial overview (short- and long-term)
1. Map your current situation
The first step is often the hardest. A financial overview begins with understanding your current situation. What do you spend your money on? How much comes in each month? And how much can you save? Only when you can answer these questions can you decide how to manage your money effectively. List all your income and expenses in a document, like an Excel sheet. But what counts as fixed expenses? Think about:
- Rent or monthly mortgage payments
- Gas, water, and electricity
- Phone, TV, and internet
- Insurance (such as health, car, liability, home, travel, life, and legal expenses insurance)
- Annual municipal taxes (property tax, sewage levy, waste levy, water board charges)
- Subscriptions (magazines, gym memberships, lotteries, etc.)
Want help creating a financial plan? This e-course will help you gain insight and make a long-term plan!
How much are your monthly overhead expenses?
Everyone spends a different amount on fixed expenses each month. At Elfin, we aim to allocate 50% of our monthly income to fixed costs. We use 30% for daily needs like groceries and personal care items, and 20% goes into savings and investments.
2. Determine your financial goals
Now is the time to think about your financial goals. Maybe you want to have a specific amount in your savings account by the end of the year—for a vacation, home renovations, or as a financial safety net. Divide your goals into short-term and long-term objectives so you know which ones to prioritize. It’s important to set realistic goals to avoid disappointment if things don’t go as planned.
3. Creating and maintaining a financial statement
With a financial overview, you’ll have a clearer understanding of how to reach your goals. Keep updating your overview regularly and critically review it from time to time. Are you still on track? Do you need to make adjustments? This way, you can steadily build your wealth. You get to choose how much time you want to spend managing your finances—whatever works best for you!
Are you ready to start creating your financial statement? Give yourself time to organize everything. Before you know it, you’ll be well on your way to achieving your financial goals!
