Joining Pocketbook last week forced me to make a significant lifestyle choice – no more corporate salary. This meant some serious financial belt tightening was required so I could support myself.
I have a pretty complex financial situation; accounts with a few banks, 2 credit cards and some investment mortgages. I’ve always done okay using Excel, putting in some grunt work to help me understand whether I could afford to buy the car, or get a mortgage before these important purchases.
In this case however, the thought of doing this analysis weekly myself so I can track and change my spending behaviour is something I dreaded.
Using Pocketbook
Pocketbook is great because it segments my spending into different areas – without me doing that hard-work. I can then drill down and work out what the spending is and if I can potentially cut back in that area.
Using this, I quickly zoned in on my discretionary spending and started to target some easy fixes to reduce overall weekly spending by 25%. All without significantly changing my lifestyle.
So out of this, I’ve set myself 4 simple steps:
Cutting 1 night of going out each week – I spend way too much on “Entertainment”. By cutting out 1 night, I can reduce 20% in this category.
Sending daily deals emails to a special folder – I’m pretty bad with jumping on emailed deals on a whim, buying too much online. So now, all these emails go to a special folder, out of sight, out of mind. I’m targeting a 70% reduction in “Ecommerce”.
Getting on a pushbike – I spend a lot of money on petrol these days. Now that I’m working from our home office (‘Silicon Creek’!), within biking distance away, I’ve dusted off the old pushbike. I think this can save me 30% on “Car & Travel”.
Making my own lunches – Most of my “Personal” spending is on lunch money. If I cut most of these and replace it with an extra 20% spent on groceries, that should cover lunches. Besides, a Woolies just opened up right next door!
Budgeting feature coming soon
We’re hard at work here at Pocketbook building out our next big feature – budgeting. We believe the best way to start budgeting is to start with historical spending and make adjustments. Just like how I’ve set the above 4 steps for myself.
As always – our number one goal is to keep it ridiculous simple.
Bosco
I think it’s fantastic you’ve been able to identify four areas that allow cost cutting. But a lifestyle is simply a summation of habits. Maintaining those cost cuts will come down to consistency and willpower.
Looking forward to see those budget feature updates.
Thanks Terrence, the idea is this budget feature in a more user friendly way can help with real-time monitoring.
Starting to change those sticky habits. Have you signed up?
Great blog! I got quite creative and learned to cook for the first time in my life. Creative might actually be an overstatement – I learned to love noodles.
I am just about to start using the personal finance tracker from Xero. Knowing how much I could survive on and what I spend now…scary – time to go back to basics.
Oh – should have added – now I am of course going to try Pocketbook!!!
This feature is pretty neat, though being so brutally and frankly presented with your frivolous spending can be quite disconcerting ;).
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