How to keep track of your expenses

Posted by Ian on August-19-2011 under Save Money

Keeping track of your finances is always a good thing to do and by doing this you’ll be able to save. Think about the times you find yourself asking, at the end of every week or month, “Where the hell does my money go?” One minute your are flush with money after receiving your monthly, weekly or two-weekly paycheck and the next minute you’re having to borrow a couple of bucks from a friend to buy lunch. Money, for many of us, is like water in our hands and if we don’t keep a track of where we spend it we’ll be forever asking the above question. Let’s look at some ways or methods that allow us to keep tabs on our finances.

tracking expenses

 

First of all the old tried and true method of purchasing a small notebook and writing down the cost of everything you buy is an excellent way of knowing where your money has gone. For example, if you are having dinner in a restaurant and you pay the bill with cash, pull out your notebook and write down the amount you paid as well as the how much change was giving back to you. If you need to buy new tires for your car, write down the total amount you shelled out.

Now, this may seem a little troublesome – always carrying a notebook and pen and writing down figures three or four times per day – but if you are able to create a habit of doing this, you’ll soon learn exactly where your hard earned cash is going. Once your daily, weekly or monthly spending is clear to you, you’ll be able to start using your money more wisely. It goes without saying that being frugal is a must when shopping. Spending your money willy-nilly will see you in the proverbial, poor-house, indefinitely. With the notebook recording your spending habits, you’ll soon know whether you are frugal or not.

For the tech-minded person, recording all your expenses on a computer or a smart-phone is a another method of keeping track of your spending. With today’s technology, however, one doesn’t necessary have to be a whiz with a computer or a nimble fingered smart-phone user. Indeed physical dexterity is not required;  21st century smart-phones are able to be used easily by pretty much anyone. So, if we look at that aforementioned restaurant scenario once again, instead of pulling out a notebook and pencil, just enter the amount you paid into your phone.

There is probably some sort of spreadsheet app that can be downloaded for a small fee, if not free. Every time you pull out your wallet to pay for something, make sure you record the amount you’ve spent. It is also a good idea to record credit card payments as well. If you’re one of the growing millions that prefers to use plastic wherever possible, make sure to record your credit card transactions. If using a smart-phone is not something you want to use to keep track of your spending and carrying a notebook is not something you don’t relish, perhaps using home finance software on your home computer is a better alternative.

One of the most popular, user-friendly computer software programs available today is “Quicken”. This particular product is, as mentioned, easy to use and allows users to keep their home finances in order. Obviously, this type of software is only as good as its user; if you don’t daily or weekly input data, the program will be useless – a white elephant within your system. It is therefore important to train yourself to collect a receipt for all your purchases. Everyday or week, input the receipt information into your computer and let the software keep a track of where you money is going.

You can also check out other money saving tips like how to reduce household expenses, save money on electricity bill and save money on mortgage.

Understanding how you are spending your money is not a difficult thing to do; all it takes is a little discipline. Once you know exactly where and what you spent money on, you’ll be able to make adjustments in your life and in a short time the question of “Where the hell does my money go?” will be said by others and not you.  Do yourself a favor and keep track of all your finances.




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