7 Essential Tips for Tracking Your Spending

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Never have to worry about where all your money’s gone a week before payday again!

• A good budget will leave you in a better position to hit your financial goals, prevent you from overspending and, in extreme cases, protect you from spiralling into debt.
• But the essential thing you can budget for is to pay yourself first. Try to set aside 20%, or more, of your take-home pay (after-tax) to reduce any high-interest debt, bolster your emergency fund, invest for medium and long-term goals and achieve a happy long-term future!

1. Use a Separate Spending Account

Separating your funds for various expenses is a simple, actionable step to budget better. It’s so easy to open a new account! Keeping important funds for things like bills or emergencies away from your spending account will also lower the temptation to blow all of your income on impulse purchases. That said, keep your emergency fund accessible, as you never know when you might need to withdraw from it urgently.

2. Track Your Spending as You Go

Before making purchases, be mindful of:

• What bills are coming up and when?
• How much those bills are?
• How much of your take-home pay remains?

Sometimes, a quick glance at your bank balance just won't do! This more proactive approach to budgeting reduces the risk of unexpectedly having to take on any new debt, and by being more aware of your outgoings, you may start to question the ‘need’ for some of them.  

3. Track by the Business

 Are you spending too much of your money in Starbucks when you could be making your coffee at home or at your work pantry? Does your furniture need to be luxurious, or can some of it come from IKEA or even "pre-loved" on apps like eBay? A few simple swaps of which businesses you buy from can make a big difference. 

4. Use a Budgeting App

These apps are a fantastic way to view all financial information in one place. However, these are only a great way of tracking your expenditure if you remember to regularly open the app! To prevent forgetting, enable push notifications to better prepare you for expenses such as upcoming bills. If you struggle to categorise your expenses, these apps are brilliant at giving an overview of where your spending is going. Many banks now offer some tracking of the spending you do through that bank, with a reasonable level of "categorisation" to guide you. Make the most of them by keeping the bulk of your transactions done through that one account!

5. Be Realistic!

Not every expense of yours needs looking at and adjusting. Micromanaging your expenses may even lead to frustration and burnout, so pace yourself, take it easy and seek help, if needed, from a trusted financial advisor. 

6. Incentivise Yourself

 Include exciting plans, such as a holiday, into your tracking. You may become more motivated to continue tracking expenses when the action you take results in progress towards affording that holiday! You can often add saving goals to your budgeting app, allowing for easy tracking. 

7. Few Elements of Your Budget Are Guaranteed

Your income, expenditure and lifestyle habits will change over time. Discover your best tracking method and repeat regularly, to measure success and act appropriately if needed. There's no right or wrong way to track your spending. Just make sure you have financial goals in place to aim for.

7 TIPS FOR TRACKING YOUR SPENDING. COMPLETED. ✅

Sources:

1. Header photo from Burst
2. https://www.forbes.com/sites/financialfinesse/2017/08/17/6-ways-to-track-your-spending/?sh=5621e0ff4650
3. https://www.khanacademy.org/college-careers-more/personal-finance