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Deep-dive your finances

It doesn’t take a genius to take a look at your spending and think about where you might be able to trim the fat – we can all, and should all be doing it frequently. But sometimes you need to go that one step further, to go that little bit deeper and get up close and personal with your finances. It’s not going to be pretty, and you’d better bring your flippers - because it’s going to be a deep dive.
Analysis A casual penny-saver might recommend cutting back on luxuries or buying cheaper brand groceries, but that’s not going to cut it here. First off, you’re going to need to take a look at your garbage. Reducing waste is obviously an important part of saving money, but that’s not quite analytical enough for this ‘deep-dive’ analysis. Instead, look at what you wasted, how much it cost and what, therefore, the waste is costing you. If, in a normal week, you bought a dozen eggs for $2.75 and you threw out four eggs, then you wasted 33%. This means that you can afford to pay 33% less for your eggs. $2.75 multiplied by 0.67 gives you $1.84, and that’s how much you ought to be spending on eggs. Extrapolate this for all the waste you find in the garbage to give yourself an overall target for much less you want to spend on groceries for the next trip to the grocery store. You can even take this figure further by multiplying this figure by the number of times you go grocery shopping each month, giving you a monthly target.
Targets You may find that you are able to meet your target, in which case you should continue to monitor your waste to see if you can cut down even further. On the other hand, you might find that you fall short of, or even exceed your target. This will give you a +/- percentage figure on your spending target. Keep a running total of these figures so that you can compare what you spend week on week and even month on month as the weeks go by, tracking your variance against your targets. I did warn you it was going to get deep!
Extreme Alright, I concede that this is taking the idea of looking after the pennies to the extreme, but the principle of keeping an eye on the math is still valid.
You wouldn’t take out a credit card without looking at the interest charges and fees, and you’d be well advised not to take out a loan before checking out your repayment plan using a loans calculator – it’s all essentially down to keeping track of what you spend based on percentages.


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