♦ You’re more involved in your finances
♦ You can really see when and where your money goes
♦ You’ll be able to create a more realistic budget
♦ You’ll be able to see which areas are sucking up more money than you’d prefer
♦ It makes it easier to cut back in certain areas and create goals for other areas
♦ Can help you steer clear of debt
Ways to track your spending:
Start writing down (or entering) all of your spending, yes…cash too (even the small stuff because it all adds up). The sooner the better, like if you buy something online, write it down right away and be done with it. If you don’t, you might forget or things will add up and may become overwhelming—in which case you just might not do it at all. Or, you can keep all your receipts or notes together and do it at the end of the day or week. I wouldn’t go longer than a week though.
Save all your receipts, bank statements, credit card statement and notes about where your money goes (this one is probably the most tedious, boring way because you’ll have to dig through all of it to assess your spending). You could then enter the information into a program on your computer or just a simple little notebook, or even a sheet of paper.
Online (like Mint.com) or Using software (such as Quicken or Money). If this is your kind of thing, then maybe it will be more beneficial to you. Personally, I don’t want to pay money to track my spending (though some are free) and since I have so many accounts it just doesn’t work out right—its just not for me. Also, there can be errors and not as much customization with these.
How & Why I track my spending
I keep all my receipts and notes for online purchases and payments next to my computer and input the information daily into a word document (similar to NotePad or OneNote, it’s pretty much a word processing document, Excel or another spreadsheet would also work just fine) that is identical to my Where Did The Dough Go? set-up. At the end of the week, I simply add up the expenses into categories and that’s it. It’s quick, simple and easy. I’m not saying that my method is the best there is, it is simply the one that works best for us.
I am currently tracking our spending to know when we spend money, where it goes, how much we spend in certain categories and because I want to improve our financial situation. I’m also tracking our spending because I want to be able to make a successful budget to help us achieve our financial goals.
Do you track your spending? What is your method?