You will audit one month of spending and produce a list of specific cuts with their monthly value.
A spending audit takes one real month of your transactions and turns it into three to five specific cuts, with the money they free up sent to one named goal. It takes about 30 minutes and brings together your work from lessons 4.1, 4.2 and 4.3: the wants you ranked in lesson 4.1, the recurring bills you went through in lesson 4.2 and the couple of frictions you chose in lesson 4.3. Here you apply all three to real numbers.
Use the most recent complete month from your tracking. Add a column beside each transaction and mark it with one of three labels.
Valued spending is spending you are glad about and would repeat. Neutral spending is necessary or unremarkable; rent, groceries and MRT fares usually land here. Not worth it covers anything you would rather have back as money.
Label quickly, because your first reaction is usually the honest one. If you catch yourself justifying a purchase, it is probably neutral at best.
Wei Ling, the course's example person, audits her February. All her figures are made up for teaching. She marks dinners with friends as valued, along with a Grab ride home at 1am after a late shift. Rent, groceries and her phone bill go down as neutral. She marks three delivery orders on tired evenings, two impulse buys from a sale and two subscriptions she never opens as not worth it.
Filter the column and add up everything marked not worth it. The result is your not-worth-it total, which is what the month could have saved if you had spent only on things you valued or needed.
Wei Ling's February total is S$290. It breaks down as S$85 on delivery orders, S$96 on impulse shopping, S$31 on the two unused subscriptions, S$38 on rides where the MRT would have been fine, and S$40 on small purchases she had forgotten about. At S$290 a month x 12, that comes to S$3,480 over twelve months.
People are often surprised by this number. A few find less than they feared, but most find a figure that would matter over a year.
You will not save the whole not-worth-it total, because some of it was one-off and some came from a bad week. Look for the part that repeats and turn it into specific changes with monthly amounts.
Write three to five cuts. Each one names the category, the change and the monthly amount. Vague cuts such as "spend less on food" do not last, while specific ones such as "delivery capped at S$100" do. Your recurring bills from lesson 4.2 and your frictions from lesson 4.3 are good places to find them.
Wei Ling writes four cuts:
Subscriptions from S$60 to S$25, by cancelling two services and downgrading one, saving S$35 Shopping from S$280 to S$200, using the one-day and one-week waiting rule from lesson 4.3, saving S$80 Delivery from S$150 to S$100, by ordering only on weekends and sharing orders with her flatmate, saving S$50 Phone plan from S$30 to S$15 when her contract ends in February, saving S$15
Her cuts come to S$35 + S$80 + S$50 + S$15 = S$180 a month. That is less than her S$290 not-worth-it total, and that is fine, because cuts you can keep are worth more than a bigger number you will break.
Leave your top-ranked wants from lesson 4.1 untouched. Wei Ling's top two were eating out with friends and late-night rides home, and neither appears on her cut list.
Step 4 decides whether your cuts last. Freed money left in an everyday account drifts back into spending within weeks, so it needs a named destination, ideally with a transfer that moves it on payday.
Pick one goal for the money from your cuts. Before the audit, Wei Ling had S$300 a month of future you money left after her sinking funds. She adds the S$180, so S$300 + S$180 = S$480 a month. She names where it goes: a small starter buffer first, then her credit card balance. Modules 5 and 6 work out exactly how her S$480 is split and in what order.
Then update your budget with the new amounts. Wei Ling's now reads needs S$2,145, wants S$845, sinking funds S$330 and future you S$480, totalling S$3,800. Her needs fell by S$15 because the phone plan sits in bills and premiums.
A finished audit has the month's transactions with a label against each one, your not-worth-it total, three to five cuts with monthly amounts, one named goal for the money, and an updated budget.
Go back to your most recent full month and label the first transaction.
Complete the audit and write your list of cuts with the monthly amount of each and where that money will go instead.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).