Visualize your budget flows with a Sankey diagram
There's a new fad in the financial independence subreddit, one that might be fun for Get Rich Slowly readers to play around with. People have discovered Sankey diagrams, a type of chart that makes it easy to visualize data flows. That sounds sort of geeky, I know, so it's probably best to show an example. Or four.
Perhaps the most famous example of a Sankey diagram (certainly the example I've seen most often) is Charles Minard's map of Napoleon's disastrous invasion of Russia:
Here, for instance, is a graph created by a 20-year-old student from Stockholm, Sweden:
Here's the chart for an architect living in Buenos Aires, Argentina:
And here are the numbers for a 26-year-old unmarried female computer programmer who lives in the Bay Area:
As you can see, Sankey diagrams really do make it easy to visualize certain data flows, including household budgets. You can track how various sources of income all enter a common pot, and then are disbursed to fund different aspects of your life.
Why are these visualizations so popular all of a sudden? I think it's because somebody stumbled upon Sankeymatic, a free online tool that allows anyone to build a Sankey diagram from their own data. This tool is highly customizable and includes a short but useful manual.
If you have the time (and the data), I highly recommend using Sankeymatic to visualize the budget flow for your household.
I haven't done a Sankey diagram for my own budget, but I plan to do so soon. Since May of this year, my expenses have been, well, out of whack. It's not that I'm indulging or anything, but once Kim and I decided to purchase this home, we entered a short-term phase where nothing was normal. Things have finally settled, however, and I intend to resume regular expense tracking in January.
(I'm doing it now, actually, but I'll resume reporting in January. And when I do, I'll do a Sankey diagram every month!)[For far more than you ever wanted to know about Sankey diagrams and flow maps, check out this extensive discussion at Edward Tufte's site.]