Are you having a hard time figuring out why your money is suddenly all gone a few days after each pay period? Why weren’t you able to save even a bit? A great way to start saving money is to track your expenses. As you do this, you’ll be able to see how you spend your money and if you’re spending it wisely.
- Commitment is important
The purpose of tracking your expenses is to see if you’re making wise purchases. This will help you save money later on as you learn to adjust your spending habits based on your goals. Commitment is important in this method because in doing this half-heartedly, you’ll fail to track each expense, therefore failing to figure out where exactly your money has gone. You have to want this so bad that you’re willing to commit to writing down each and even the smallest expenses you have.
- Keep receipts
Keeping your receipts is one easy way to track how much you spend. However, it’s understandable if you think this is a hassle. Still, you must do this because it’s one of the ways to achieve your goals. To eliminate the hassle of having to keep each piece of receipt, you can choose to make a digital copy of each one by using your smartphone. Almost everyone nowadays has a smartphone so we’re pretty sure you’ll have no alibi to skip this one. Take a look at these apps that can help you keep track of your receipts:
- Use expense-tracking apps
There are tons of free useful smartphone apps that you can take advantage of. You can use an expense-tracking app instead of bringing a little notebook with you everywhere you go. The convenience of these apps can help you avoid getting lazy on committing to the task. Try the following apps that are available on both iOS and Android:
- Record right away
Keeping track of your expenses will get much more difficult if you delay in recording them. If you wait to get home, or worse, a day or two before recording your expenses, there is a possibility that you forget the little purchases you made. Whether you use a mobile app or a notebook to record, make sure you do it right after every purchase.
- Don’t forget online transactions
Aside from keeping track of payments made to brick and mortar stores, you also have to keep track of the purchases you make online. Transactions of any kind, such as online bill payments and online shopping, must be recorded.
- Get the total
Once you’re finished recording all your transactions for the month, it’s time to calculate the total amount of your expenses. Combine all similar purchases into their respective categories (food, transportation, utilities, etc.). This way, you’ll be able to see which category eats up most of your budget.
- Develop a plan
Now that you know how much you spent in a month, compare it to your budget. If you are spending more than you should, look at your expenses and see which ones you should cut down on. And if you have some extra money left from your budget after settling your expenses, decide if you’ll save that money or if you’ll roll it over to next month’s budget.
Don’t feel discouraged if you find out that you are spending way above your means. You’re probably reading this article because you were already suspecting that was the case and you wanted to do something about it. Recognizing your problem is the first step in solving it. Now take the second step and apply what you have learned from tracking your expenses and start saving money!