How often do you look at your monthly expenses? Once a year? Once a month? (Gulp) never? No matter what your answer, it’s always a good idea to review these at least quarterly. My wife and I did so last weekend, and we realized that some of our monthly subscription services had gotten out of hand. As a result, we’ve canceled a few of them and saved over $40.00 a month!
FitFin gives you the ability to track both your fixed costs and your day-to-day spending in a way that’s both quick to create and to revise. And remember: FitFin automatically calculates your numbers against the 50/30/20 budgeting model to let you know how your situation compares. The 50/30/20 states that 50% of overall take home pay should go to your fixed costs (rent and other things that don’t fluctuate or fluctuate very little). Then 30% of your pay goes to variable spending (groceries, going out to eat, gas, etc.), and finally, 20% should go towards savings and/or paying down debt. The Fixed Costs area works in unison with your variable spending to give you up-to-the-minute information on how you’re doing in a given month.
If nothing else, spend 10 minutes filling out this information in FitFin and see what your numbers look like. Notice on the second line of the Fixed Costs screen (left image) that the sum of our fixed costs is $2,500, and is 50% of our $5,000.00 take home pay. This $2,500.00 number is then carried over to the Variable Spending Summary page (right image) and is the starting “allowance” for day-to-day spending. As budgets get created (for example the $800.00 Grocery budget and the $150.00 Household budget on the right screen), these values are subtracted from that starting point of $2,500.00 and at the bottom is the leftover amount of money that has not been earmarked for a budget (which is potential savings). Notice that we have $1,000.00 of unmarked money, which is 20% of our take home pay of $5,000.00. So in this example, we are right at 50/30/20. Obviously, most people won’t match up exactly like this, but hopefully you now get the idea of how 50/30/20 works. And again, the beauty is that FitFin calculates these values automatically for you based on the information entered.
This is definitely a worthwhile investment of your time.
Once your fixed costs and variable spending budgets are created, the colored bars will let you know how you’re doing. Green means that you’ve spent 75% or less of your budget (as you can see, several of the budgets in the example above fall into this category), while a yellow bar means that we’re at 75% or more in spending. Red means we’ve gone over budget in that area.
And if you’re only seeing red bars all the time? Then what? FitFin can help you analyze what you spend down to a level not offered anywhere else. So you can not only see that you spent $100.00 at Walmart, but you can see that you spent $19.34 on coffee, $13.47 on junk food, etc. And you can pull your Spend By Product report to see what you spend the most on and buy the most often over time. It’s a great way to cut your day-to-day spending. Plus, FitFin gives you spend-predictive shopping lists to allow you to know what you’ll spend even before you shop. It’s proactive budgeting you can’t get elsewhere!
Download our app and fill out your numbers just to see what it looks like. You might decide that you need to do some trimming, or you might find that you could save more than you’re currently doing. Either way, it’s always nice to know your numbers.
Check us out at www.fitfin.com to find helpful videos for using the app and even links to download our iOS and Android apps!