Are you having trouble managing your money? Does it seem to disappear before you have time to save a dime? If so then it’s time to track your spending.
Starting right now, write down every purchase you make for the next month. Use your smart phone, or write it down on a piece of paper, I don’t care, just start doing it so you can see where your money is going
What are you spending your money on?
Coffee, snacks, lunch, drinks, groceries, and shopping, it all adds up fast! When you start to track your spending you’ll subconsciously start spending less since you know.
Remember the key is to track everything for an entire month, don’t forget about those automatic expenses, such as your rent or mortgage, cell phone bill, magazine subscriptions, gym memberships. Don’t worry if you’re shocked by how much you’ve been spending, there’s a reason all personal finance experts recommend tracking your spending, with this new info you can create a budget.
Create a budget
This is pretty simple really. Just take the amount you’re taking home in pay every month and then write down all the expenses you discovered from tracking your expenses. It may not look pretty, but at least you can see how much money is coming in and how much is going out. If you’re looking for a detailed spreadsheet to help with your budgeting, I recommend this one from Squawkfox.
Once you have your budget in place it should be pretty easy to get your spending under control. Budgets change so don’t be afraid to make minor adjustments as you go along.
Why I still track my spending
You would think by now I would have stopped tracking my spending but the thing is, it keeps me honest. I love using credit cards, I’m a certified points whore so I charge everything whenever I can. Sure I pay off my balance in full every month, but when using credit it’s incredible easy to spend. There’s no money leaving my wallet, my credit card almost feels limitless, so if I didn’t continue to track my spending then I could easily go over my budget.
Credit isn’t for everyone, but did you know you can use cash to track your spending? If your budget for eating out is $200 then take out $200 at the start of the month, when you eat out use this cash only. When you start running out of money, it’s time to cut back on eating out. Okay this is actually budgeting but it’s technically tracking your spending since you’re seeing where your money is going.
No matter what stage of life you’re in, or how well you know your finances, it’s important to track your spending. Knowing where you money is vital to having a stable financial future.
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