Do you struggle with budgeting your money? If so, don’t worry; You aren’t the only one. Many people have this problem. Budgeting and managing your money can be challenging. Knowing how to track your spending is key to budgeting success. This will save you from having financial stress and overall will help you save more money!
You want to be in control of your finances, and we want to help you with that. So, how do you track your spending? Here are a few tips to help you evaluate and track your spending.
Create a Budget
You can’t really track expenses without having a budget so start by writing down your monthly income. Then, make a list of all your expenses for the month.
- Start with food, shelter, clothing, and transportation as these are necessities. Based on past bills, you should have a pretty good idea of how much these items cost you per month.
- Once those are covered, look at other expenses such as entertainment, eating out, gym memberships, cable or streaming service, etc. These are expenses that can be trimmed if you’re having trouble balancing your budget.
- Finally, part of your budget should include saving for emergencies, big purchases and long-term wealth. If possible, experts recommend saving 10% of your income so don’t forget to “pay yourself” as part of your monthly budget.
Your income minus your expenses should equal zero. If you are in the negative, you already need to make adjustments to stay “in the black.”
Record Your Spending
This is SO important. It’s easy to lose track if you don’t keep up with what you’re spending. Record your expenses throughout the day so you have a running total of what’s left in each category. Find a way to track your spending that works for you. Some ideas:
- Pencil and paper – if you prefer a “low-tech” approach, this works great, as long as you hang on to your receipts and write everything down. The nice thing about this method is that you are actively involved in the process which helps maintain control.
- Envelope system – This is when you give yourself a cash allowance and all the expenses you pay for in-person come out of this cash-only system. At the beginning of each month, you can break the cash up into expenses and, for example, take your grocery envelope with you to the grocery store. Let’s face it though, paying with cash can be inconvenient and may become a security issue; however, physically watching cash leave your envelope inspires commitment.
- Budgeting apps – There are some great budgeting apps that make it easier to track your spending right from your phone. Check out this article with some budgeting apps to consider. It’s important to remember that an app isn’t going to shut down your spending when you’re about to go negative but if you aren’t watching where your money goes, you’ll never know where it went!
Stick to Your Limits
Self-discipline and self-control are keys to staying on budget. You and only you can stop spending when you’re out of money. At the end of each month, evaluate your spending to see if you need to adjust your categories. Saving and debt management must take priority over vacations and eating out.
We want to help you with your financial needs and provide financial guidance. If you struggle to control your spending, follow these tips and you may be surprised how a plan combined with a little self-discipline can help you regain control. It may take a little time to get the hang of things, but when you do, you’ll feel so much better about your finances.
Remember, it’s still early in the new year so it’s the perfect time to add a new year resolution to the list. Make 2020 a great year to be in control of your spending!