Financial Control of your Money

Home economy or finances are not all about saving, it is probably even more important to know where your money is going to.

Awareness of your spending will give you a good overview to understand where you are actually spending your money or you thought you would. It will help you to see if you are paying things that you forgot you were, what you pay on a monthly basis. Besides all this it might help you to save too.

Around 4 years ago my husband and I started to wonder where our money was going and if we actually could save some money to invest in a property. The web is full of applications to help you to do this, even some banks have this as part of their online banking services.

We decided to use the app : You need a budget YNAB.
This app helps you easily to:

• Set up the different categories for your monthly expenses (like Electricity, Water etc), Rainy Day Funds and Savings. After setting these categories the purpose of this exercise is to assign each € you earn to any of these categories. So… think of your monthly income. For example: Income 1.200€ (600€ Monthly Expenses, 300€ Rainy Day Funds, 300€ Savings).

• Once these categories have been set up to your personal needs and the incoming € have been assigned to their “job”, it´s time to contrast this with your bank extract. It sounds tedious, but once you get the hang of it, it becomes easier every month.

Result: You start having control of every cent and feeling more comfortable.

I do it every 2 weeks, to see how the first half of the month is doing and… how much we have left.

It´s really important to look at your bank extracts in detail, I know they are long and sound boring but banks make mistakes too and sometimes you get charged for stuff you don´t even notice. Some of the things I found out were:

• I had a private insurance that I wasn´t even using, that I still was paying on a monthly basis

• In Spain using an ATM different to your bank can sometimes incur in fees. If you don´t control this it can get up to 20€/month just for this. (With 20€ you can take public transport in Madrid for approximately 16 times!)

• It is helpful to know what the average cost of electricity and water is monthly.

• Seeing my exact phone expenses made me research on more phone companies and save a little bit here.

• Same for insurance, check your annual payments and ask around in other insurance companies if they offer the same for a lower price!

Information is bliss when talking about money! Save yourself some unwanted surprises!