Tracking your expenses is imperative to financial success. It is vital that you know exactly how your money is being spent and how much money is being spent. Following a budget accurately and to your advantage isn’t possible if you are unsure of where your money is going.
There is a tendency to feel overwhelmed or inconvenienced when it comes to tracking expenses; this is expected as most of us lead busy lives with full schedules. Sometimes, the last thing you want to deal with is monitoring every penny spent. Luckily, there are methods to make the process easier. In this article, we’ll discuss 6 of the best ways to track your expenses.
Utilize Multiple Bank Accounts
Your bank account experiences different kinds of spending during the month - spending on bills, spending on debt, spending on saving, and spending on daily living expenses. It can be one thing to track your spending on bills and debt, but when it comes to your purchases at stores it’s an entirely different thing to keep up with. To make this easier, you can consider setting up a separate account with your bank that is solely used for spending. Essentially, you designate a portion of your income each month to spend on things like groceries, clothing and dining out and strictly use that account.
Budget According to Store
It can be frustrating to shop and then try to dissect and track your spending by your receipt. Some people have found solace in the simplicity of instead tracking spending by store. If you’re like most people, there are certain stores you frequent regularly for groceries, household items, clothing, and other things. At the end of the day, week, or month being able to look at your spending in each store can give you a good idea on how you’re spending your money.
There are those that like to track and categorize everything as you go, but this can be painstaking. Fortunately, utilizing spreadsheets can help you list, sort, filter, and total your spending. Utilizing Excel or Google Sheets can even allow you to spreadsheet on the go!
The Envelope Method
This may be a method you’ve heard of before - the envelope method. You will need to be comfortable making your purchases in cash to utilize this way of tracking. Basically, you’ll allow a certain amount of cash to be spent in various categories. For instance, you can have an envelope for groceries, one for clothing, one for entertainment, etc. Once the money has been spent in the envelope, that indicates you’ve met the budget and you need to stop spending.
Use Apps on the Go
For those always on the go, there have been multiple apps developed that can help you track your spending and expenses with your smartphone or laptop. Mint.Com is one company that is becoming increasingly popular as a budgeting tool to help keep you on track.
Analyze at the End of the Month
Many people have no interest in or time to track expenses regularly throughout the month. When this is the case, you can analyze your spending at the end of the month instead. Luckily, many banks these days will allow you to quickly download your statement; you can also use the traditional paper statement route. When you take the time to analyze the month’s spending, it can give you a good idea of where you’re spending and where you can make potential cuts and reductions. It’s easy to feel that you’re spending less in one category than you really are, but the numbers from your bank statement won’t lie and will allow you to make positive corrections to keep you financially on track.