If you’re planning to track your spending to improve your financial health, knowing where to start can be tricky. There are, however, a variety of ways to ensure you stay firmly within a budget month after month without too much difficulty.
Taken from our downloadable eBook Improving your Financial Health: 8 Credit and Money Management Tips, our guide to Tracking your Spending will show you a number of great ideas to help you keep your finances firmly in check.
Why you should track your spending
We all make those everyday purchases without truly considering the costs, but if you start to track your spending, you could soon find yourself with much healthier looking finances. We’ve therefore outlined a few key reasons for why you should regularly keep an eye out on your money:
- Know where your money is going: Making the odd purchase here and there, such as a coffee on the way to work every morning, can quickly mount up. For example, £3 per day can add up to £90 per month. If you keep track of the money being spent on such things over the course of a month, you’ll quickly get an idea of where your finances are being spent and where you could be saving.
- Keep your finances in order: Once you know where all your money is going, it’s likely you’ll start avoiding all those unnecessary expenses you were once making. As a result, this will hopefully see your finances start to improve, and ultimately, help in reaching those long-term goals such as that once in a lifetime holiday.
- Improve those savings: Having an idea of where your money is being spent could ultimately lead to you saving money and thus growing your finances. So should the boiler breakdown or the car gets damaged, the sudden costs shouldn’t be as difficult to manage.
How to keep track of money
It’s all well and good knowing where your monthly budget is going, but putting a plan together, so you can take control of what you’re spending, is where the important work is.
- Create a plan: Putting together a regular budget, whether it be a daily, weekly or monthly one, can help to lower the risk of overspending while also showing where your money is regularly going.
- Breakdown your spending habits: Listing where your money is going, such as on rent, travel and shopping, will help to show you how much is being spent every month while highlighting where you could be cutting back.
- Keep receipts: Receipts can often end up just filling our wallets or purses until they are thrown away but collecting and safely storing receipts can be a real help when tracking your spending. All those day to day transactions quickly build up and odd purchases can easily be forgotten but keeping a hold of receipts provides a physical record of your day to day spending.
- Online transactions: Don’t forget about those transactions that come directly out of your account such as direct debits, these can often go missed and are usually for larger amounts too.
- Don’t overspend: Perhaps most importantly for keeping a track of your money is to simply make sure you keep to your planned budget. Overspending can quickly throw plans into disarray while undoing all your previous hard work.
Manage money effectively
Now that you’ve got an idea of why you should track your spending and the methods for doing so, you’ll likely be wondering what the best way to record all this information is. Below we’ve listed a few of the best ways of doing so:
- Pen and Paper: The traditional way of managing your money, writing down your spending via a pen and paper can be helpful as it requires you to actively engage with your finances. Jotting down figures on paper and using a calculator can often provide a clearer picture of where your money is being spent.
- Spreadsheets: Keeping a spreadsheet on your laptop or computer is another great way of tracking your spending. Offering a clear overview and able to be easily shared, a spreadsheet can make a great option for couples trying to save.
- Smartphone Apps: There are many great smartphone apps available, such as Yolt, that allow the user to have straightforward access to all their accounts in one place while setting daily, weekly or monthly budgets. Though the biggest benefit of using an app is in the ability to always check on your finances from your smartphone, whether that’s at home or on the go.
When you keep track of money, no matter how big or small, your personal finances will always look healthier. If you want to learn more great money saving tips, then download our eBook Improving your Financial Health: 8 Money and Credit Management Tips now.
Alternatively, if you have a question and want to get in touch, you can contact Uncle Buck at email@example.com