Spending: Four Ways to Track It
Let’s face it, some of us just struggle with keeping track of our spending. It’s like trying to to hold on to a wet bar of soap, we try to hold it in our hands but it just keeps slipping out.
Managing your expenses can be difficult but there are few simple tricks you can try that will keep you on track and saving money.
1. Make A Budget Plan
One of the most common and easiest ways for you to keep up with your expenses is making a plan. By making a plan, you will be able to see which bills are important and which expenses are costing you money.
Planning will also keep you from spending on items you don’t really need or can’t actually afford. Being focused and prepared for your monthly or weekly spending is key to saving money. By setting out specific contributions to your obligations, you will be able to better control and manage your money.
Making a budget plan will also allow you to spend big whenever you really want something. Say for instance, you want a new camera or you want to take a week long vacation in the Caribbean. You will be able to do it because you have saved enough money but also because you spending this extra cash won’t affect your financial obligations. You will be able to pay your bills and go on a luxury vacation, at the same time, without having to worry about having enough money for both.
2. Make a Spending Spreadsheet
You might think that writing everything down is a lot of work but it an also be very beneficial. Tracking your daily spending habits will show you where every single dollar you earn is going and make you more aware of your “actual” spending habits.
You should write down the exact amounts and items on the spreadsheet, so that you are accurately tracking your spending. Rounding could make you think your spending more or less than you actually are, and will only give you a skewed sense of your spending habits.
Being honest with yourself, will only benefit you in the end. Also you will be able to set clearer goals and tasks when you accurately record your spending. This spreadsheet technique is to help you save money and make better decisions on when and what to spend your money on by seeing all your unnecessary expenses.
3. Open A Savings Account
When all your money is in one place, it can be difficult to keep a handle on where it’s all going. You have it all at your disposal so you forget that once it’s all gone, there isn’t anymore. Opening a second account will keep you from spending all your money but will also help you realize how much money you spend.
It’s always a good idea to take small percentage of each paycheck and put it into a savings account immediately so that you won’t accidentally spend it. The amount in your checking account will be your available funds and what you can use for bills and extra expenses.
Keeping the accounts separate is important and will force you to save. Plus, it will have you living off a smaller monthly budget which in the end will become routine so that you won’t even miss the money that is in your savings account.
4. Use Cash
Most people prefer to use their credit or debit cards when making purchases but this can be disastrous for your personal finances. Using a card for all of your transactions will keep you from physically seeing how much money you’re spending because no actual money is being used for the transactions.
Changing over to cash when spending will hold you more accountable for your purchases and will literally allow you to see how much you are spending. Also this is a simple way to stay on a small daily budget too. If you only have twenty dollars on you for the whole day for lunch and dinner, you will stretch out this small budget for both meals and might even have money left over. But if you have your card, you will be more prone to spending more money because you know that you have more money available if you need to use it.