self expense
Managing Personal Expenses Using Six Sigma
Many people have experienced the pinch of money from time to time. Despite earning more income, expenses, as well as inflation and cost of living, also seem to be proportionally scaling to the same heights.
While being frugal can help minimize expenses, it is more important to properly manage money.
As a Black Belt, I decided to use Six Sigma to aid in managing my money – after all, Six Sigma is widely accepted and has been implemented across various industries for many years. Thus, I commenced a Six
Sigma project on managing expenses. This project is based on my own experience; all the data, inputs and outputs are related to my life.
Define
I began this phase by creating a suppliers, input, process, output [SIPOC] chart and a high-level process map. The process map showed how my income was received and how it was spent on various expenses; the map also showed when credit cards and loaned were used if there was a shortage of income.
Next, I created a critical-to-quality (CTQ) tree to categorize the expenses as fixed or variable. Fixed expenses included rent and equated monthly installments (EMIs); variable expenses included water bills, electricity bills, cell phone bills, traveling expenses and vehicle maintenance.
The problem statement, written in the project charter, was: “There is a high proportion of spending compared to the income received.” The scope of the project included monthly salary, loans and credit cards; perks, investment returns, compensation and lottery winnings were not considered as part of the income scope. The goal statement was to reduce personal expenses by 50 percent. I estimated the financial benefits of the project would be the saving of a few thousand Indian rupees every month. I also allocated a timeline for the project: one month each for the Define, Measure and Control phases, and two months each for
Analyze and Improve.
Measure
During this phase, I collected data
Many people have experienced the pinch of money from time to time. Despite earning more income, expenses, as well as inflation and cost of living, also seem to be proportionally scaling to the same heights.
While being frugal can help minimize expenses, it is more important to properly manage money.
As a Black Belt, I decided to use Six Sigma to aid in managing my money – after all, Six Sigma is widely accepted and has been implemented across various industries for many years. Thus, I commenced a Six
Sigma project on managing expenses. This project is based on my own experience; all the data, inputs and outputs are related to my life.
Define
I began this phase by creating a suppliers, input, process, output [SIPOC] chart and a high-level process map. The process map showed how my income was received and how it was spent on various expenses; the map also showed when credit cards and loaned were used if there was a shortage of income.
Next, I created a critical-to-quality (CTQ) tree to categorize the expenses as fixed or variable. Fixed expenses included rent and equated monthly installments (EMIs); variable expenses included water bills, electricity bills, cell phone bills, traveling expenses and vehicle maintenance.
The problem statement, written in the project charter, was: “There is a high proportion of spending compared to the income received.” The scope of the project included monthly salary, loans and credit cards; perks, investment returns, compensation and lottery winnings were not considered as part of the income scope. The goal statement was to reduce personal expenses by 50 percent. I estimated the financial benefits of the project would be the saving of a few thousand Indian rupees every month. I also allocated a timeline for the project: one month each for the Define, Measure and Control phases, and two months each for
Analyze and Improve.
Measure
During this phase, I collected data