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How to use a cash book for personal finances.

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How to use a cash book for personal finances.

If you read my blog you might think that I am obsessive about money. That I’ve figured out my entire financial route and I’m a star investor. Or just that I’m a cheapskate. Of all these things cheapskate still comes closest haha. But not really. I do keep a cash book and I live frugally, but enjoy life. This way I can easily order a drink on the terrace without having to save on anything else. I can also enjoy a holiday without saving on anything else. As I type this I am sitting among the sheep at my holiday resort enjoying the good life. Or if I don’t feel like cooking, I even order something. The latter doesn’t happen very often, by the way. Getting food delivered is really expensive!

cheap sheep
Sheep in the garden of the hotel 😉

How much time do I actually spend on my finances?

The short answer is about an hour a month. Let’s have a closer look.

On the first of the month (or at least that week) I review my finances. I have been doing this since 2013. Then I log in to all my accounts (bank accounts and brokers) and I put everything I have spent per category in an excel file. My own excel cash book. The greatest benefit of this monthly ritual is insight. I have insight into my income and expenses. In addition, I can easily determine where I can save money or where I have to adjust when things get out of hand. I can also see at a glance whether I will achieve my financial goals.

Note everythink manually

I type in everything by hand. Every transaction i made. So I have to retype manually every subscriptions that I don’t use and other leaks in my expenses every month from my bank statements to my cash book. This makes me want to quickly get rid of expenses and subscriptions I don’t value. It hurts to write it down at the end of the month.

“You must take control over your money or the lack of it will forever control you.”

Dave Ramsey

For me it looks like this:

my cash book
with fictitious numbers but in my actual cashbook.

Investment book

Since this year, I also keep track of my investments once a month. That way I have a better view of my return. That is sometimes a bit difficult to find in the various apps of the investor accounts. I also add up the balances of all accounts and any cash. At the end of the year, I therefore have a monthly overview of how much my net worth was at that time. All in all, keeping the entire household book takes me about half an hour to 45 minutes. Not that long, but enough to have a good overview and to focus on my goals.

Look ahead and look back

At the end of the year, I look back on the past year and look forward to the year ahead. I list all income and expenses and the investment I made (easy since I kept track of that every month) and then I see how I did. For example, this year I aim to pay at least for the entire renovation of the attic without touching my piggy bank and investments. At the end of the year I will know exactly if I hit my goal. For more on my investment strategy click here.

I encourage you to do this too if you want to take (back) control of your money. It will take you an hour to set up and then an hour a month to keep up. Your overview of what and how you spend becomes a lot clearer. Maybe you always thought you spend about 50 euros a month on home delivery, but now you see that it is more around 150. Then you can do something about it!

Take control of your money back and notice that as soon as you no longer have money worries, you experience a lot less stress and anxiety.

Do you keep track of your finances in a cash book? Let me know, I like to learn new insights!

Until next time!

Elske

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