personal finance

personal finance

Personal finance is made of incomes and expenses. Here we want to understand how can balance cost optimization vs growth.

We categorize expenses in this way:

cash

money to spend for small expenses (<50) in small shops (bakery, stores), restaurants and concerts

travel

trips, holidays

living

daily expenses (rent, commuting, bills)

income

the net yearly income (salary, freelancing, prizes)

free-time

events, concerts, music, hobbies

sport

and healthcare

savings

what remains at the end of the month

expansion vs contraction

There are as well many expense types:

fixed

I try to avoid them as much as possible, just cell phone and server

subscription

the expense you can't optimized

insurance

growing trend of buying lawyer insurances

bills

cell phone, server, electricity, gas

living

to sustain a life: rent, grocery

food

a lot to optimize here

rent

a lot to optimize

sport

a lot to optimize

transportation

when you live far from your working place

maintenance

when you have properties

car

simple cars have simple maintenance

house

in your own property you can save a lot of costs learning carpentry

expansion

the money you spend to expand yourself or to increase the value of assets

workshop

the gears you might need to save cost in maintenance work

upskilling

your experience can provide additional services and build a new career

producing

you can start producing your own services and if not for selling for reducing costs

investments

money you park for multiple years to add some interests on your earnings

passive

long range investment, you occasionally re-balance 2/3 times a year

active

you frequently control your positions on the stock market

products

It's hard to keep track of the value of our skills, gears and assets. We decide to up-skill, buy assets and spend time investing in learning capabilities which can increase our wealth or reach. Most of those decisions are gut feeling and it's hard to track what really contributed to our overall improvement. The goal is challenging but it doesn't mean it's not worth trying it.

To help understanding personal finances a couple of products could be developed.

asset management

an app making pictures of a gear, writing the description, checking the price online, sending an alert when it is convenient to buy

asset optimization

life time and usage of an object

asset return

the share of lifetime per project and estimated return

project cost

estimated cost of each project and overall value

market benchmark

what would be the cost for a professional service and the value gap

savings

Differentiate your savings

emergency

liquid money you can use for emergencies (repair, help…)

passive investment

money you shouldn't touch for a long time (pension, kids)

active investment

require dedicated education and time

year by year

Every year conditions might change: job, housing, emergencies and our personal finance should adapt to it. Changes:

job

some industries are really precarious, it's hard to keep working in IT for more than 2y for example. Salaries can change and some unemployment time comes along

productivity loss

health issues

emergencies

sometimes the focus gets shifted pretty quickly

catastrophe

earthquake was a reality for us, weather will become more and more relevant

health issues

among family members

expansion

I want to invest in assets, hobbies or education

exploit

I want to use part of my savings for my personal growth

growth

Growth is an important part of our life, we want to be wise with expenses but that shouldn't compromise our personal life. Here we see what we pay but it's not possible to clearly quantify the return. It is important that everyone understands the importance of each point

friends and family

are important and we don't need to discuss how important is to be generous but even if one thinks to save money being cautious with gifts and time the expenses definitely balance out.

lifestyle

that's the biggest trap, thinking we need to dramatically change our lifestyle as we earn more. That's a big fault which consumes most of our savings. Flat, cars, restaurants and events are the most relevant examples

travel

get into the life of different cultures and way of living, change your way of thinking. This shouldn't be just visiting touristic places

education

a good balance between skills you gain and the usage you do of that skills. Often it's hard to monetize

languages

in some cases they open you a career, understand the clients in the local language is a plus. In many other cases either the earned level is not sufficient or your company doesn't value it

culture

understand each specific feature of a culture, in some cases you are compatible, in others not. This is a plus for negotiation

skills

nowadays it is hard to learn a skill and capitalize it straight away. Competition is tough and the level is high. You need to come to a specific niche where your quality/price/customization comes to the right point

assets

the gears you need to grow an activity or learn new skills

hardware

I invested a lot in hardware to eventually save cost in maintenance

wood

the cost is increasing a lot, being able to work on wood can save a lot of money. Being able to work on it in the forest can save you a lot of logistic costs

metal

many constructions can be done with scrape metal, welding is pretty cheap

carpentry

that saves a lot of costs

hobbies

they might start with a simple time filler but can become source of income

music

it's really hard to make serious income with it but why not keep trying?

acting

super important for professional life

tailoring

textile is pretty expensive but can be a source of income

nightlife

depends a lot on your type of friends, mine definitely are owls. Cutting expenses to meet friends, going to their concerts or their events is not an option for my taste

travel

Of course cutting on travel is an obvious choice for improving personal finances but if travel is a life experience the money spent is worth it. Spending the money wisely while traveling is important but sometimes difficult. The most flexibility comes from accommodation where you have more room to save

business trips

mostly refunded

trips

one shot movements for visiting family or friends

holidays

trying to select meaningful destinations and make the travel as an experience rather than a tick box list

transportation

When you live far from your working place

bike

my favorite, best deal and good for health (hearth, eyes, lungs). I count 300km/month

public

in few cities worth the money, mostly less efficient than a bike

car

in some places the only option, you can optimize a lot

renting

works in city centers, on demand cost. Some companies provide you the car as less taxed compensation

owning

I want to bet on cars that can last at least 20k km and 20y lifespan

living

Living costs can be highly tweaked

rent

monthly cost for a flat/room/house

grocery

supermarket

cloth

cloths

transportation

bike is the best choice

gift

some gifts

bill

recurrent expenses

cell phone

hard to cut but every optimization count

internet

my demand lowers overtime and can be optimized

gas

I recently opted to buy bottles so I control when I buy it

electricity

there are many cases where you can produce part of your needs

server

I still have hosted services and domains to pay

subscriptions

none in my case, they are the hardest to optimize

fines

sometimes they come

theft

at least 4 in my case with significant losses

income

Without income no optimization is possible. Earning more or increase sources of income helps of course a lot. Capitalize the savings is something we can add on top

salary

from a company

service

from a client

prize

funds

fines

to detract

lawyer

to detract

tax

to detract

investment

earnings

bank

commissions

free-time

Free time is a big part of our personal growth. It impacts our well-being and increase our chances as well to be overall more proficient in life

book

reading or watching documentaries

essay

to understand a topic in depth

novel

gain inspiration and motivation

comics

a pretty big expense

events

museums

mainly painting and archaeology

concerts

music

exhibition

temporary exhibitions

hobby

free time to spend with people motivated by the same passions

dance

couple or group dances

acting

theater

sawing

tailored costumes ~1k

lessons

learning new skills

music

occasionally

music

musical instruments and gears can be quite expensive and usually don't lose their value

gears

synth, mixer, microphones

instruments

violins, sax, clarinet, guitar

gaming

luckily I'm still stuck in finishing 8bit games so I didn't update spending

writing

a critical item in money/time optimization, it is really hard to find a topic you can cover which still has some niche to cover. It is difficult to quantify the return but I think that nowadays with AI is the most important skill to master.

blog

technical and personal articles

websites

graphics for your passions

art

pencil, papers, colors, canvas

bar

this goes along with staying with your friends

restaurants

most are overrated, despite being a waiter for over 10y I think optimize on restaurants harms not

sport

Sport is an essential part of our lives. We can optimize a lot but knowing it's bad if we cut too much. I opted for buying gears as an initial investment and keep using them for a long time range

outdoor

passion for outdoor

sailing

something simple shared ~1k

water

kayak, swimming ~1k

diving

license pretty expensive ~1k

hiking

medium initial investment (tent, shoes) ~1k

biking

can get really expensive, I tried to be moderate ~2k

skiing

big initial investment ~2k

climbing

big initial investment ~2k

courses

rugby

acrobatics

parkour

water-polo

dance

lindy hop

forrò

folk

health

I put medical expenses in this category because sport can prevent many further expenses

prevention

usually it pays of

analytics

We categorize all expense types marking each entry as an expense group

import os, sys, re, json
import pandas as pd
baseDir = os.environ['HOME'] + "/lav/cios/erp/bank/"
uniD = pd.read_csv(baseDir + "finance_history.csv")
print(set(uniD['group']))

{'cloth', 'lawyer', 'art', 'hardware', 'price', 'garden', 'house', 'cash', 'electronics', 'bar', 'restaurant', 'sport', 'phone', 'tax', 'bank', 'invest', 'fine', 'bike', 'charity', 'book', 'music', 'travel', 'car', 'rent', 'bill', 'event', 'health', 'boat', 'grocery', 'gift', 'salary'}

categorize expenses

I manually and automatically processed the expenses from my history

[x] uni_18 [x] uni_19 [x] uni_20 [x] uni_21 [x] uni_22 [x] uni_23 [x] uni_24 [x] uni_25 [x] uni_26 [x] vals_15 [x] vals_16 [x] vals_17 [x] vals_19 [x] vals_20

#+name estratto_conti

cd ~/lav/cios/erp/bank/
ls uni/uni*csv
ls vals/vals*csv