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I attended a seminar organised by a vendor of business intelligence application software recently and that presentation jogged me to write about developing our own dashboards for personal finance.
Some of you might be wondering, “Business Intelligence? Dashboards? What do these things have to do with me?”
The terms may seem fancy, and they often do since application software companies tend to do that to justify the price of the efforts in developing a solution for your problems, but ultimately the whole concept of business intelligence when applied to your own personal finances is: know what you have and know how much money flows in and out of your life. It’s as simple as that. A dashboard in the physical world can be the dashboard of the car which shows how fast you are driving (speedometer), distance and fuel gauge. These show you the key indicators of your vehicle that tells you if you’re going too fast (or slow) and if you need to top up your vehicle’s petrol.
Developing Your Own Dashboard
Building a dashboard is simply having a visual way to communicate information about your personal finance status to yourself (hopefully to influence your behaviour to save more or spend less or both!) I personally track two key things in my own finances. The first is my personal net worth. This is an Excel worksheet that has my total assets and liabilities and shows my net worth at any one point in time.
The second key thing I track is my cash flows from income, interest, dividends, capital gains (or losses) against my total expenditure. The resulting savings (or deficit) shows how successful I am (or not) in a particular month to hit my savings target. Typically, I aim to save about 20%-25% of my takehome pay (excluding compulsory CPF contributions) for each month. Some months I miss that target, other months I more than exceed (e.g. year end bonuses)
Here are some examples of the gauges or visual indicators about my personal finances. Read more...[caption id="attachment_1355" align="alignright" width="150" caption=" "][/caption]
I attended a seminar organised by a vendor of business intelligence application software recently and that presentation jogged me to write about developing our own dashboards for personal finance.
Some of you might be wondering, “Business Intelligence? Dashboards? What do these things have to do with me?”
The terms may seem fancy, and they often do since application software companies tend to do that to justify the price of the efforts in developing a solution for your problems, but ultimately the whole concept of business intelligence when applied to your own personal finances is: know what you have and know how much money flows in and out of your life. It’s as simple as that. A dashboard in the physical world can be the dashboard of the car which shows how fast you are driving (speedometer), distance and fuel gauge. These show you the key indicators of your vehicle that tells you if you’re going too fast (or slow) and if you need to top up your vehicle’s petrol.
Developing Your Own Dashboard
Building a dashboard is simply having a visual way to communicate information about your personal finance status to yourself (hopefully to influence your behaviour to save more or spend less or both!) I personally track two key things in my own finances. The first is my personal net worth. This is an Excel worksheet that has my total assets and liabilities and shows my net worth at any one point in time.
The second key thing I track is my cash flows from income, interest, dividends, capital gains (or losses) against my total expenditure. The resulting savings (or deficit) shows how successful I am (or not) in a particular month to hit my savings target. Typically, I aim to save about 20%-25% of my takehome pay (excluding compulsory CPF contributions) for each month. Some months I miss that target, other months I more than exceed (e.g. year end bonuses)
Here are some examples of the gauges or visual indicators about my personal finances. Read more...
[/caption]
I attended a seminar organised by a vendor of business intelligence application software recently and that presentation jogged me to write about developing our own dashboards for personal finance.
Some of you might be wondering, “Business Intelligence? Dashboards? What do these things have to do with me?”
The terms may seem fancy, and they often do since application software companies tend to do that to justify the price of the efforts in developing a solution for your problems, but ultimately the whole concept of business intelligence when applied to your own personal finances is: know what you have and know how much money flows in and out of your life. It’s as simple as that. A dashboard in the physical world can be the dashboard of the car which shows how fast you are driving (speedometer), distance and fuel gauge. These show you the key indicators of your vehicle that tells you if you’re going too fast (or slow) and if you need to top up your vehicle’s petrol.
Developing Your Own Dashboard
Building a dashboard is simply having a visual way to communicate information about your personal finance status to yourself (hopefully to influence your behaviour to save more or spend less or both!) I personally track two key things in my own finances. The first is my personal net worth. This is an Excel worksheet that has my total assets and liabilities and shows my net worth at any one point in time.
The second key thing I track is my cash flows from income, interest, dividends, capital gains (or losses) against my total expenditure. The resulting savings (or deficit) shows how successful I am (or not) in a particular month to hit my savings target. Typically, I aim to save about 20%-25% of my takehome pay (excluding compulsory CPF contributions) for each month. Some months I miss that target, other months I more than exceed (e.g. year end bonuses)
Here are some examples of the gauges or visual indicators about my personal finances. Read more...
Dear Derek
Thanks for featuring my post!
Be well and prosper. :-)