New year, new way to manage your spending
I know that using the new year as a metaphor for a new beginning is a bit cliché, but there may not be a better time to start to get a handle on your finances. If you’re like most of us, you probably overspent during the holidays, so financial stress may be on the brain. That’s probably reason enough for you to at least think twice about spending, but it’s also a perfect time because the new year is the start of a new taxing period. It’s also the time when health insurance deductibles start over, so you might be spending more on doctors visits and other health-related situations at the start of the year. All these things can lead to the need for having more day-to-day cash at hand.
FitFin can help you with that because we help you put your money into three buckets: Your take home pay after taxes, your fixed costs (mortgage, rent, etc.), and your variable spending (groceries, going out to eat, etc.). By identifying the first two, it helps you calculate your “allowance” so that you know what you can spend on your day-to-day variable expenses. FitFin also uses the 50/30/20 budgeting rule, and as you’re calculating your buckets of money, FitFin automatically checks your percentages against the 50/30/20 model. Quick refresher of 50/30/20: 50% of your take home pay should go towards fixed costs, 30% towards your variable spending, and 20% towards saving and/or paying down debt.
Once you set up your budget, you then simply start tracking your spending by manually creating expenses (which takes about 10 seconds) or by taking pictures of your receipts. FitFin breaks down your receipt data to not only tell you what you spent at the macro level (i.e. $100.00 at Walmart), but it also tracks what you spent at the individual item level so that if you ever need to cut back on spending, you can see exactly where your money goes! You can also compare prices for the things you buy at different stores!
And since you’ll now know what you spend for a box of Cap’n Crunch at Target, you can actually take that information to build a spend-predictive shopping list. So, for example, if that box of cereal costs $3.99 at Target, you can put the item name and it’s price right into your shopping list, so that each item you put on your list has a price that will tally up an expected spend total. Then you can check that against your budget in real-time, before you even go to the store. This is proactive budgeting!
Check out our How It Works page on our site for more detail. Now is a great time to give FitFin a try!