How I learn to set up my own system

In the last post I talked about having an automated system but…. I didn’t really went into the details.

I figured it’s best to show you rather than just tell you.

Just some tactical steps that I personally took.

Write down some notes. And once you’re ready, let’s dive in!!

“Before knowing where you want to go, you must first know where you are.”

I forgot who told me this but I first used this approach when I was time blocking my calendar.

I wanted to know what I was spending most of my time and make my day more productive. The goal was to get more done in the day in lesser time.

Sounds simple right?

But in order for me to do that, I must first track what I spend my time on before I even begin to think about adjusting.

Same thing with finance. The principle stays the same regardless of the context you apply this to.

And that’s what I did. Thankfully for me, I already have a software that helps me do that.

It’s the same one I used for my every single one of my clients.

Here’s a sample of what the dashboard looks like:

1. The Overview

This tells me everything I need to know:

• Free Cashflow (Excess, be it positive or negative)

• Net Worth (How much I’m worth monetary wise)

• Salary (Money in)

• Expenses (Money out)

• Assets (Cash generating)

• Liabilities (Cash depreciating)

For this post, I’m going to focus on the Cashflow. This is where the system comes into play…

2. Cashflow

“Cashflow is life flow.” - A guy whose name I forgot. Sorry…

There’s two parts to this:

1. Cash surplus = Net Income - Total Expenses

2. Ratios: Savings & Expense

   • Saving ratio = Monthly savings ÷ Monthly Income

   • Expense Ratio = Monthly Expenses ÷ Monthly Income

This tells me how much I’m saving and spending - either too little or too much.

The goal is to keep these ratios in the green.

For expenses, here’s what I did differently.

First I list down each individual expenses and how it cost per month:

• Groceries

• Bills

• Transport

• Gym memberships & Supplements

• Savings

• Investments

• Travel Fund

Once I did that, I group them by categories:

• Fixed Expenses - Bills, subscriptions etc

• Savings - Emergency Fund, Goal Oriented (reno, car) etc

• Investment - Stocks, ETF, Crypto etc

• Travel/Holiday - Flight tickets, accommodation, activites etc

• Transport - Ezlink, Fuel, Taxis etc

• Groceries - This is… well… self-explanatory..

I then create a bank account for each of this categories - both physical bank accounts and digital.

This way I know for sure I wont over spend by only using the the card that is mean for it’s specific purposes.

The next thing to do is to set up an automatic recurring transfer to each of this account.

I won’t get into details of what are the specific bank accounts I use but you get the point.

Usually, I’d reserve this software exclusively for my clients but since you’re in my network, I want to extend it to you.

As a thank you for staying and reading what I write.

If you’d like to see how this software help you visualise a clear picture like it has for thousands others, simply fill up this form here and I’ll reach out to confirm the details.

It’s totally free and coffee is on me - I’ll have to cap this to the first 5 since my schedule is pretty packed for this quarter.

If not, that’s totally cool. Either way, I appreciate you for being here.

Hope this help.

See you in the next one.

-RK 🥷 

Disclaimer: The contents found on these pages have not been reviewed by the Monetary Authority of Singapore. The purpose of this page is for educational purposes only. It does not constitute as financial advice. All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone. You are recommended to seek advice from a professional financial advisor if you have any doubts or do your own research.