As you cannot live without oxygen likewise you cannot live without spending money. It is one of the hard facts of life. Spending Money is an integral and necessary part of our life. You cannot just stay away from it.
But there is one more aspect to spending money. And that is you can manage your spending. This is also true. For a happy and prosperous life you are required to organize and manage your spending habits. It is one of the essential and vital key through which you can unlock the doors of financial well being for yourself and family.
So how would you manage your spending? Or in other words how would you keep track of your spending?
Getting answers to this important question is crucial. So in the ongoing post we would discuss “How to Keep Track of Your Spending”.
But before we move on further let us first find out why we need to keep track of our spending.
Actually spending is an ongoing and daily phenomenon. From the start of the day till you go to sleep, you spend money in numerous ways. Whether it is having a coffee while going to office or buying grocery items, chocolates for children or medicine or spending money on dining out, you spend money in more than one way on a daily and recurring basis.
This way you keep on spending money without realizing where and how much money you are spending. And most of the times, it happens that you end up overspending on certain categories which you never come to realize. At the end of the month, you find yourself short of cash.
But the fact is that the money which you have overspent could have easily been saved and it would have required only a little bit of efforts from your side. You would then never run short of cash and still have had a quality time with your family and friends.
So you see why it is important to keep track of your spending.
Now when we have seen the importance of tracking our spending, it is the time when we move on to find out how to keep track of your spending.
One of the easiest ways of keeping track of our spending is to do it manually with a help of a notebook and a pen. Well initially, you would feel awkward in noting down your expenses but believe me you would soon get over this feeling when you realize its overall benefits.
You need to first prepare categories and sub-categories on which you spend. For example you can include categories such as groceries, utilities, household, medicine, insurance, gasoline, travelling expenses, entertainment, clothing, school fees, education, miscellaneous, irregular and unexpected expenses, and can have other categories as well. Then start to note down every penny that you spent. It may be as small as buying a chocolate or having a cup of coffee to huge expenses on luxurious items.
Once you have the detailed and categorized list of spending with you for a period, which can ideally be a month, add the figures to find out what is your spending for each of the category or sub category.
At this stage, it would be helpful if you have a budget with you. Budgeting would actually help you know the difference between the amount that you had set for spending under each category and the actual amount spent by you.
Now you can exactly find where you have overspent. You have the spending chart with you. Then you can undertake a corrective approach to rectify the mistakes of overspending. You get to know where you can save the money.
Suppose you find out that for a particular month you have exceeded your monthly budget of spending on entertainment. Now you can easily rectify this, as you know how you have overspent on entertainment and then can control that expense.
Another way to keep a track of your spending is by using online services, applications and software dedicated to managing your spending. Even you can transfer the notebook entries to an Excel Worksheet on a weekly basis and then do all the calculations from there.
So you see that keeping track of spending is easy and highly beneficial for us. The above discussion on How to Keep Track of Your Spending illustrates this clearly. The above technique help you to save money and have better control over your finances. It would require continuous effort from your side but the rewards are huge.