Manage Savings

Why Saving

Simple explanation, build your dream, increase your lifestyle.

Detailed explanation:

How to Save?

  1. Get a bottle and start saving penny by penny.
    This only works if you are only use cash.

  2. Open a second saving account and keep you savings fund in this account.
    This might work for some people but not effective to manage your savings.

Virtual Savings Account

Most people may have more than one savings accounts, e-wallets and debit cards. Each of this account will have certain amount of money. To accurately reflect your expenses and manage your savings, it's best to use virtual savings account.

Let's open a virtual savings account, free for life to manage our savings with Personal Finance Planner spreadsheet using category Savings and SavExp (Saving Expenses). I will show you how this works...

Let's Start Savings

Let's explain this by example:

  1. Row 41: John received salary payment of $5000.

  2. Row 42: He decided to save $2000 of his salary as savings. This amount is recorded as Savings, Self.
    Savings, Self is a special category created to identify savings allocated from salary.

  3. Cell G9 shows balance fund $3000 available for spending for the rest of the month.

  4. When come to month end, John can deposit his balance unused fund as Savings, Self which sum total of actual savings of the month.

  5. To encourage savings, we don't recommend to carry over unspent money to following months.

TIPS: In case John had overspent the allocated fund due to unforeseen circumstance, John had to enter a record of Savings, Self with negative number at month end to close the difference, which mean in actual he saved less than planned amount.

Savings Analysis

From the analysis page, you can see that 40% of John income is keep as savings.
Let's hope he can continue this every month.

TIPS: Click Data > Refresh All to update the analysis table with latest data.

Other types of Savings

Investment, dividend, FD (Fixed Deposit) Interest are other source of savings income which add value to your account. They are recorded in different sub-category under Savings.

Example on the left show entry of saving account dividend recorded as Savings, Dividend received in bank account, which also debit into our virtual saving account.

Managing Savings

When John saved a certain amount of money in his saving account, he decided to put his money to work for him for higher interest rate, such as Fixed Deposit, Unit Trust and other form of investment tool.

Let's say he decided to put $1000 into fixed deposit. This transaction is recorded as Savings, Fixed Deposit as shown on right.

  • $1000 deducted from saving account, and

  • $1000 added to fixed deposit account.

  • We deducted $1000 from our virtual saving account as well indicated that the fund deposit into fixed deposit is from the virtual savings account but not from available Fund Balance.

TIPS: If John forget to deduct $1000 from Savings, he will have only left $2000 fund balance on hand.

Spending on Savings

When John need to spend on his spending to fulfill his goal, he will then withdraw the amount from this virtual savings account. Expenses spent from savings account is recorded as SavExp, <Description>.

Expenses that we spent from savings account are ad-hoc and normally not recurring. Using category SavExp, this transaction is excluded from analysis on monthly expenses on essential items. This give you more accurate estimation on how much you need to spend on each month.

Note: Take note that Fund Balance for John still $3000 after he spent $120 from his virtual savings account.

Let's start saving and pursue your first goal.

Integrity Check

Value in Check box check for mistake in virtual savings account, which expenses or income recorded under Savings and SavExp but does not have correct debit and credit value recorded in Savings account.

TIPS: Remember to click Data > Refresh All button to update all the analysis table before you start cracking your head to hunt for the mistake.

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