Estimating Annual Spend
This template lets you estimate your annual spending — and the total amount you can save today — using just 13 months of bank statements. No detailed budget or projections needed.
⬇ Download the template (Excel)Step-by-step method to estimate expenses
Here's how to get a good estimate without collecting every single bill or transaction.
- We assume you have a main bank account where your salary is deposited and most expenses happen. Collect 13 months of statements for this account.
- Fill in the balances for each month in the template.
- Classify all outflows as 'asset purchase' (investment) or 'expense'. Money spent on an investment eventually comes back when you liquidate the asset — e.g. a transfer to your brokerage account, or a home down-payment, is not an expense; it builds an asset you can sell later. A holiday, on the other hand, is an expense. Since there are far more expenses than investments, just identify the investments and add them up each month — everything else is an expense.
- Similarly, classify inflows from investments as 'asset sale'. Your salary is regular income; selling your motorbike is an 'asset sale'. Returns like dividends or interest are also a partial asset sale.
- You should now have five numbers for each month:
- Balance at the start of the month (B1)
- Income (I)
- Asset purchase (P)
- Asset sale (S)
- Balance at the end of the month (B2)
- Estimate the expense using these five numbers: start with B1, add income (I) and asset sale (S) — that's total inflow. Reduce it by asset purchase (P) and end balance (B2). The residual is your expense.
- Expense E = B1 + I + S − B2 − P
- Add the expense (E) for every month across the year — that's a good estimate of your annual expenses.
The difference between your total income and total expense is your savings.
