Ways To Track Your Spending

Ways To Track Your Spending

Before you can learn how to manage your money well, you need to understand your financial picture and have a working budget in mind. For many people, creating a realistic budget that can maximize your earnings and minimize your costs can be the most difficult part. The best way to create a functional budget is to track your spending to find out where all of your money is really going on a daily basis.

It may seem tedious to have to track everything you spend money on, but these days there are several ways you can choose to easily keep track of your money without spending too much time. Check out a few of these options below for tracking how much you are spending and to finally get a grasp on your financial life.

Write It All Down

For those of you who like this tried and true method, consider getting a little notebook you can dedicate to keeping just your spending notes in. If you plan on taking these notes on your phone or other device, make sure to choose a single document or space to keep all of your spending information in order.

A benefit of writing it down is that it makes you think about what you are spending money on and how much money you have recently spent immediately.

Use the Envelope Method

Another classic money tracking strategy has been dubbed the “envelope method” for its clever utilization of envelopes to budget and track spending. For this method to work, you need to already have a general idea of how much you expect to spend and how much you can afford. Once you have these rough estimates, you can make one envelope for each of your spending categories and fill it with the cash you believe you will need to take care of those expenses in the next month. In this way, you do not need to write down everything you spend money on because you already know how much money you had allotted to that spending category’s envelope and you can easily see how much money (if any) is left over at the end of the month. If your original expectations did not match up to reality, you can easily switch up how you divide your money for the next month’s envelopes.

Get Separate Spending Accounts

This strategy can be helpful for people who like to think of their spending in broad categories instead of individual costs. Similar to the envelope method, using separate accounts requires you to already have an idea of your budget and your primary spending groups. Armed with this information, you can open separate checking or savings accounts for each of your primary spending categories. Once you have a good idea of how much you would like to budget for each group, you can even set up most bank accounts to automatically withdraw a requested sum from one account and deposit it into another without you having to lift a finger. Once you have separate bank accounts set up, it is easy to see how much you are spending in each group.

Track by Store

If you are one of the millions of Americans who has an arsenal of store credit cards, this may be a good strategy for you. A basic way of tracking your spending is to simply look at what store you spent the money at. For example, purchases from a grocery store can be automatically put into the living costs account along with rent and utility payments, your charge from the movie theater would definitely go into the “fun” category, and so on. If you have a card you use for a mix of purchases, you can create a specific budget item for purchases from that store. Taking advantage of an app or program that helps categorize your spending may be beneficial for this strategy.

Use an App

Luckily, we are no longer restricted to keeping our spending notes in a paper notebook if we do not want to. Today, we can choose from using classic organization tools like Microsoft Excel or download any of the new apps that can automatically sync your earnings with your expenses to help you keep track of every digital transaction you make. If you are at all tech savvy, odds are at least one of the myriad of new apps on the market today can help you manage your money and track your spending efficiently and effectively. Even more, you can usually sync these apps across all of your devices so that you never have to worry about leaving your proverbial spending notebook at home.

Download and Dissect After the Fact

Another simple way to start tracking your spending is to look at your past spending habits. Instead of noting all of the purchases you make in the next month, download a history of all the purchases you made in the last month.

Unless you make a majority of your purchases in cash, this method should give you a decent idea of how you tend to spend your money. You can become more familiar with any charges or fees charged by your bank by looking at your spending history. For many people, reflecting on spending history is the best way to identify trends in your spending habits that may have otherwise gone unnoticed.

Take a Course

There is always more to know about money management skills, investment tactics, burgeoning markets and so many other important topics that are related to your finances. Consider signing up for a finance or investment course at your local community center or college. You could also take one of the many free online courses that cover money related topics now available to students around the world from hundreds of participating universities. If you are interested in earning money management qualifications, many of these e-learning courses also offer certification and even degree programs.

Consider Hiring a Financial Consultant

A common misbelief is that financial consultants are only for the rich. In reality, financial consultants are the people that may be able to help you the most to become rich. If you have even a couple thousand dollars you would like to save and invest, you can find a qualified financial consultant that will be happy to show you how to make the best of your investment. In most cases, these consultants charge a percentage of the investment as their service fee, though some also work for flat rates. You can hire a financial consultant for a one-time meeting or for an ongoing relationship, whatever meets your needs and budget.

By Admin