Tracking your spending is a must if you want to do better with money.
I believe that if you do not, track your income and expenses, you are not successfully managing your money because you do not know where you are spending it; you do not know where it is going and therefore you cannot – effectively manage it.
Tracking your spending, on the surface, appears to be pretty straightforward and simple, but it can be a complex process and quite difficult.
It is the consistency that tracking your spending requires that is the hard part and makes it difficult and overwhelming.
To help fight this difficulty, you need to get into the habit of consistently recording your expenses. Use some type of log to record the expense.
Whatever you use as a log, a piece of paper, some type of register, or a spreadsheet, every time you receive money, you should record it in the log.
Whether it’s from a paycheck or gambling winnings, record it in the log. And every time you spend money, whether it is a bill or that cup of morning coffee, record it.
Track Your Spending Every time, every time, every time!
Tracking your spending helps to make your money and you’re spending more real. You will begin to see it come in and go out and see it as a tool to help you achieve your goals.
It will give you a sense of control.
Your awareness of your money and your behavior with money will sharpen, allowing you to make changes to improve your financial situation.
This is an important skill with money.
Here are a few tips to help you in tracking your spending:
- Make it a routine. Once you get into the habit of tracking your spending, it will become easier. And always, do what works for you. No one system is perfect for everybody. The important thing is to track your spending. How you do this is up to you!
- Be more careful with transactions that are easily forgotten. Some transactions, online transactions, transactions without a receipt, can be quickly forgotten. Take special steps to remember these.
- Get a receipt for everything. There are not too many places where you can spend money and not get a receipt. If they do not give you one, ask for one. Additionally, make it a habit of putting all your receipts in one place so that you know where to find them and do not forget where you put them.
- It is best to record your transactions daily. Although you can track expenses once a week, you may find this hard to do. By tracking expenses daily, you do not run into the problems that you would by tracking them weekly such as I can’t remember a transaction or can’t find a receipt, etc.
For some, recording expenses will make you more connected to what you spend.
It will make you think more about each purchase, and you will begin to see if your purchases line up with your values. This may help you to keep unnecessary spending under control.
Tracking your spending is a rewarding process.
It will paint a picture of your spending habits as they exist and not as you think they exist. You can then use this information to create a spending plan, or, at the least, to serve as a picture of where your money actually goes.
How do you track your spending? Share your thoughts and subscribe to the GoldenRules Blog and learn how to create a winning spending plan for you and your family.