Tracking your spending could be the key to financial success
Do you ever feel like you have no idea where all of your money goes? You get a paycheck, you pay a few bills, you go out with your friends at the end of the week, and by Monday, you’re broke. Where did it all go? You might be afraid of keeping a closer eye on every dollar you spend, but doing so just might be the key to long-term financial success.
How to Do It
Tracking your spending is not as hard as you think! You can do it with the aid of technology or with pen and paper. It can be as simple as writing everything you spend in a notebook or notes app. Many banks have tools that automatically display how much you have spent on different categories, such as gas and groceries, in your online banking profile, and there are apps that do the same thing.
No matter how you track your spending, it’s important to remember to include everything you spend. If you’re using an online tool that tracks your debit card, be sure to factor in money spent in cash or using a credit card. Be sure to break down your spending into different categories when you are finished tracking.
Why It Matters
Tracking your spending keeps you accountable. If you’re writing down a $3 mid-afternoon trip to Starbucks every day, you’re more likely to notice the wasteful habit.
Breaking the spending down into categories makes it obvious where most of your money goes. Once you have the information, you can do something about it.
How to Make a Difference
Once you’ve analyzed your spending habits, you can change them. If you see that you’re spending a lot of money on non-essential items, you can find cheaper substitutes. Your habits can only change if you’re aware of them.
As with any other subject, financial knowledge is power.