KPI for tracking personal finances posted in category personal finance
WinningKPI - personal finance - KPI for tracking personal finances posted in category personal finance
This indicator is for measuring of the following monthly processes:
Expenditures
Living Cost ( expenditure? ) e.g. bills, rent, transportation, etc
Savings
Balance
etc
More details: tracks personal finances and gives a % report to be embedded in a dashboard to show visually monthly status of balance, change in expenditures vs previous avg, % of savings ( money left ) vs montlhy avg, etc
KPI Units: %
KPI Time Frame: update once a month
This KPI is aligned to (personal management: savings vs expenditures ) strategic objective.
Hello Munir! Thank you for raising such an interesting topic.
Let me ask you a question: what do you actually need - a dashboard or a scorecard? (www.bscdesigner.com/whats-the-difference-between-a-dashboard-and-a-balanced-scorecard.htm).
The difference in the case of personal finance is that in the case of a dashboard one focuses on measuring (e.g. living costs, savings, balance) and in the case of a scorecard, one focuses on achieving a specific objective (buy apartment, buy new car, invest in pension plan and so on). I would personally recommend anyone to focus on the scorecard part, as it makes more sense.
In your question you mentioned some excellent KPIs for personal finance (the dashboard part). For example, you mentioned the "% of savings (money left)” is an excellent indicator of how a good saver you are. Financial books tell us to save at least 10% each month.
I believe that what's actually missing is some goal behind these KPIs. E.g. why does one need to save money? Once you have this goal, you can calculate the time needed to accomplish this goal and your savings plan.
For example, you want to have money for a house down-payment. Let's take $10,000 as an example. You plan to buy a new house in 2 years, so it means that you need to save at least $417/month. You can also plan some control points, for example in 3 months you need to have $1,251 in your savings account and in 1 year you need to have $5,000.
In this way your financial activity (regular saving) is aligned with your objective (in my example of buying a house). Every month you can check if you are on the right track by comparing your current results with your planned results for this period.
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