Guest article provided by: hussainanalytics.com
How business intelligence can help you budget
With the increase in the cost of living, it has never been more important to budget and track where your money is being spent. Every month, unexpected expenses occur, and over time, it is hard to see what your money is being spent on and where it is going.
This is where business intelligence can help us track our expenses, see what we are spending our money on, and find ways to reduce our costs. In this article, I will explain the following:
- What is business intelligence?
- 7 benefits of using business intelligence for budgeting
What is Business Intelligence?
Business intelligence (BI) is where we can collect and store data from various data sources which we then analyse so businesses or individuals can improve their decision-making. It is essentially analysing our data through charts and graphs rather than tables.
Visualising our data enables us to delve deeper into the data and makes it easier to analyse and make decisions. While business intelligence is mainly used in business (hence the name), it can also be used for personal use.
In terms of using business intelligence to budget for personal use, you can create a spreadsheet to write down your total income and total expenses each month or to simplify it, you could download your bank statement in an excel file format and append it to the file with each new month’s bank statement and then you can visualise this to help analyse your expenses.
There are many free business intelligence tools such as Excel or Power BI, in Excel, you can write down your budget and in Power BI, you can visualise your data. Power BI has a free desktop version and is easy to use, there are many great resources to learn more about Power BI and business intelligence in general.
7 benefits of using business intelligence for budgeting
Business intelligence can help you with your budgeting and track your costs, it can help you reduce costs amongst many other benefits. Here are 7 benefits of using BI to budget:
Identify opportunities for cost saving
You can use business intelligence to help see where you can save money and then use that saved money to put away for savings. You might have subscriptions that you no longer use or recurring expenses that you no longer need. By visualising the data and keeping a tracker of your expenses, you can be alerted to this and as a result, cancel these regular costs.
Highlighting potential risks
Throughout the year, there are unexpected expenses that can affect our monthly costs, business intelligence can help us flag these as a risk in terms of that due to this unexpected expense, we might not have enough money for other expenses, the benefit of BI with this is that we will be aware of this before it becomes a big risk and we can take the relevant action to mitigate this risk.
Prioritise your spending
As I mentioned earlier, with the increase in the cost of living, times are tough for us all and we need to budget appropriately, BI can help us get an insight into what we are spending money on and from this, we can see what is most important to us and prioritise these expenses.
Budgeting for a specific goal
We all have different financial goals and what we want to spend our money on, some people may be planning to save money for a down payment on a house, and others might be saving to go on holiday. With business intelligence, we can help create a budget for these specific goals we have and ensure we are on track and being held accountable to ensure we reach our financial targets.
Improved financial visibility
By visualising your personal financial data, you can get a full picture of your total income and your total expenses. This will help you see our financial performance which can help you with your decision-making when it comes to budgeting and spending.
Analysing areas for future growth
Business intelligence can help you identify potential areas where you can grow your income, this can be new sources of income or ways to increase your current income, and this can help improve your overall financial situation.
Better financial forecasting
You can enhance your budget forecasting as when you analyse the last few months of your expenses, you can find trends and patterns of regular expense types and the regular costs associated with these expenses, this can help you make more accurate predictions of what your future expenses are likely to be and as a result of this, enables you to plan your financial future more effectively.
Business intelligence can help you identify your costs and help you see where you can save your money. If you’re interested in learning more about budgeting tips or how to save money in general, Adulting Digest is the right place for you.