In: Accounting
(you can make it up)
Over a seven-day period, write down every penny that you spend, and what you buying. Include in your analysis, the monthly expenses you identified earlier in the course. Examine your analysis. What patterns do you see? WHAT IS YOUR LATTE FACTOR? That is, what might you be able to sacrifice, in favor of plowing more money into your savings? Now that you have identified areas of savings, how might you be able to make the savings AUTOMATIC? Does your employer have a 401K savings plan? Or, instead of asking for new clothing at holidays or birthdays, might you ask your Grandparents for gifts such as a savings bond, or a silver or gold coin? Share examples in support of your response.
My expenses over the past 7 days:
Date | Particulars | Amount in $ |
14/05/2020 | Milk | 7.60 |
14/05/2020 | Vegetables | 22.55 |
15/05/2020 | Saloon | 12.25 |
15/05/2020 | Bread | 7.45 |
15/05/2020 | Laundry | 6.75 |
16/05/2020 | Gas | 10.95 |
17/05/2020 | Netflix Subscription | 10.00 |
18/05/2020 | Broadband | 7.85 |
18/05/2020 | Mobile bill | 6.55 |
19/05/2020 | Pharmacy | 15.45 |
19/05/2020 | Fruits | 6.75 |
20/05/2020 | Staples | 21.55 |
Total | 135.70 |
Identified patterns:
Food-related expenses = Milk+vegetables+bread+fruits = 7.60+22.55+7.45+6.75 = $ 44.35
Entertainment expenses = Netflix + Broadband = 10.00+7.85 = $ 17.85
Transportation = Gas = $ 10.95
Medical expenses = Pharmacy = $ 15.45
Other expenses = Saloon + laundry + mobile + staples = 12.25+ 6.75 + 6.55 + 21.55 = $ 47.10
The latte-factor:
Identified areas of savings:
Netflix subscription = $ 10.00
Fruits = $ 3.00
Staples = $ 7.25
Saloon = $ 6.25
Total possible savings in expenses = $26.50
So, there is a possibility to save $26.50 towards savings per week.
Changing saloon options and foregoing Netflix subscriptions are automatic.
Modifying food habits related to fruit consumption and staple usage also results in automatic savings.
My employer is not having any 401(K) savings plan.
And Yes, it is possible to ask my grandparents to change my birthday presentations from clothes and gift vouchers to saving certificates, gold which will provide me with ease is keeping up with my savings. They would be more than happy to do so.