February 15, 2014
Why is it so important to track your spending? How?
Why is it so important to track your spending? How?
It is critical that you track your spending so you know where your money is going, where you can tighten up, and if you’re spending more than you’re making. Some techniques for tracking your spending are to use one method to purchase everything, print your statement off every month and break your spending into categories (bills, groceries, etc.), put your numbers onto the spreadsheet Finley has on this website, review your spending carefully, become more aware of your spending based on your previous month’s tracking, design a plan that is simple and sustainable, and stick with it!
You need to know how much you are spending on things in your life, you may be spending a very large amount of your income on something that really doesnt benefit you that much, such as getting coffee 3 times a day. If you know where your money is going you can plan a way to cut down on that area, you can go about this a few ways, you need to pay for everything with one source, either, debt card, credit card or cash, then keep a record of what all you bought with this sources, the credit card and debt card will be the easiest, but if you want to use cash, a small journal that you update daily would be useful, there is a useful spreadsheet on this website or mint.com that you can use to help you also.
You both provided very good answers, well done! Let’s review.
Tracking your spending helps you track where your money is going, it’s that simple. Find a simple and sustainable way to do it and that can be done by using one type of payment method (credit card, debit card, cash) and then place those purchases in a category and onto a spreadsheet. Evaluate where your money is going and start the process of developing a budget to meet your goals. There is no better time than right NOW.