Why Visualizing your information makes ultimate sense while planning your expenditure?

What is the problem statement?

If you have tried managing expenses in your home during pressing circumstances ie., when you have loads of other things to do you may have hit a wall looking at the complexity it can present to you. Sometimes you are totally confused and disorganized and are unaware of the expenditure that is going to hit you in the near future.

There are people who are good at this no doubts. But as we age, many of us feel that the amount of data we need to process and the amount of expenses we need to gauge is enormous and we may miss out on the important ones many a time. Couple that with other disturbances such as pressure at work, household chores, lack of sleep and a general lack of time and we tend to move towards assistant apps on our phones which will keep track of the costs for us.

Again there are some really good apps in the market for that such as expense managers ranging from simple ones, all the way to ones that even manage and read your bank statements and show you your networth value in order you get to know how you are performing. But sometimes these are overwhelming and they themselves become items on which we need to spend extra time feeding the data for them to interpret.

The need of the hour …

To be honest with you, given the amount of complexity that I have in life personally, I am looking out for a million different ways to keep things simple all the time. Be it at my work, or conversations, or at home – consolidating accounts, keeping emails short or avoiding them, using collaboration boards when possible and so on and so forth.

So in the quest for keeping things simple, I had to find a way to organize my expenses that I am facing or will face in the future. Again I did not want to plan years ahead. Say just for this year. 12 months. And I had one burning need. The data must be visible to me all the time, without any sort of reminders and I must be able to track the progress on the goals or tasks.

The solution – simplicity

I started thinking like a kid – what would a kid do given the limited resources he had access to, to note down something? Yes! Jot it down in a pen and paper. But then I am an adult so I can add a bit of flair to it, right ?

Size

So first I scaled up the size to a marker sheet or a cardboard sheet fairly large enough. This solved two issues for me – one, I can write a lot and put in many items there by varying the font size choice, and two – I can walkby where it was put up and glance at it whenever I wanted to.

Buckets of content

There was no need to put in all information randomly and in an unordered list on that sheet. But rather to split it into many different categories or buckets as we will call it. Its the same simple thing everyone knows and does. Since I planned for a complete year one obvious division was monthwise expenditure. Another was by type of expenses – some are mandatory expenses, some are nice to have but not important expenses, and others also included things like savings – basically money that you deem will not be accessible to you for spending (for me I considered this as an outgo)

Content representation

Content can be represented in multiple ways as you would know it. A to-do list which is simple and says some things are done when they are done. Or a more organized list by date or month with amounts per each item to give more info. I chose a sort of hybrid approach – for some buckets I used plain text without end dates, and for some items like savings I used “Smileys” or “Frownies” – meaning if there is a smile, I saved up for the month, else I did not.

For categorization vertically it was columns for each month. For horizontals I divided based on priority or differentiation. Smileys were best shown below expenditures since it was a savings category. Everything on top was super important but everything in the middle was nice to have though not must to have.

I could still use one more separation for the things I actually binged on, when it was not planned to give me a visualization of where I wasted money. How you put the data is up to you as long as there is one view on everything.

The results

The experiment had such a positive impact on me, I cannot convince you enough that you must try it out too

  • Ensure you use large size cardboard paper to list out your items
  • Ensure you categorize clearly
  • Ensure you put things that are not important lower in the list
  • Use both text and indiciations like smileys to make important things fun
  • Smileys in my case have to be earned and not earning a smiley relates to a whole month (basically a large time period) wasted which questions your basic discipline abilities and keeps you on track without getting disturbed or distracted.
  • Keep adding the things you are additionally buying so you have a full picture at end of the year to discuss and reflect
  • Put in things like vacation and family time as they are important too and cannot be compromised. Basically everything you want to do or attend to should be in there
  • Any new recurring investment should feature in the next year’s chart without being missed out.
  • Show people and talk about your chart to people and try to inspire them like I did for you.
  • Last but not least celebrate small but significant achievements both on savings and being accurate about your planning.