4 Key Steps to Help Track Your Spending
Money management can be a challenge for many people. It makes sense that you need to spend less than you bring in on a monthly basis.
Gaining control of your financial well-being
This means having a clear view where each hard-earned dollar is going.
Most people say they have a good idea of their spending habits then are surprised when they tally up their expenditures. When you begin to track your spending you may find there are some easy ways to trim the budget and improve your bottom line.
1. Record every expense. Whether it’s a $2 muffin or a $100 night out, every dollar counts. Include everything you spend money on in a month. This includes your debt payments such as credit card bills and car payments, as well as transportation, clothing, gifts, groceries, alcohol, sports and entertainment. Leaving out your daily muffin at the office may not seem like a lot, but over the course of a week that adds up to $10 and by the end of the month adds up to $40.
2. Define categories and track where you are overspending. Highlighting where your money goes is much simpler when you assign a label to your expense. Track categories such as housing and necessary bills such as gas and electricity separately from other household bills like internet and cable. The reason being that while these bills are tied to your home, they really fall under the entertainment category.
Examples of common categories:
• Housing expenses
• Loans/Credit Cards
• Car/Transit expenses
• Entertainment (this includes restaurants and coffee breaks)
• Physical Fitness (including sports or gym memberships)
• Clothing and footwear
• Personal Care (hair appointments, nail salons)
Breaking down your spending into smaller chunks helps to easily identify if your monthly personal care expenses are exceeding your grocery bill or if your local restaurant is taking home a large chunk of your income.
3. Use a consistent tracking method. Whether you are a pen and paper kind of person, prefer working with spreadsheets, or have discovered the simple-to-use financial tracking apps available, make sure to record your expenses on a consistent basis otherwise items will be forgotten or overlooked, and you won’t have an accurate picture of your spending.
4. Get good advice. Tracking your money is a great way to keep on top of your budget and find ways to trim unnecessary expenses, however, if you find that you are consistently in the red, no matter how hard you try, it’s time to get advice from a professional.
D. Thode & Associates helps individuals make sense of their financial future by offering professional financial counselling and sound solutions that work.