Do you want to achieve financial freedom? Do you dream of the day that you won’t struggle to stay within your budget and you don’t have to resort to debt? The way for you to reach this goal is to track your expenses and learn good financial control.
There are more people than you would think who neglect to monitor their expenses, simply spending what they need to until it’s all gone. Even those who track expenses often don’t stick to their budget or aren’t sure exactly what to do.
The financial tracking process can be rather tedious for some. To be fair, it can be tricky to get the hang of. That being said, it isn’t nearly as complex as many assume it to be. Here are a few important tips to help you track your expenses on a regular basis to gain utmost financial control:
1. Create Financial Awareness
The first step to do is to develop financial awareness. You have to determine your financial status. Along with this is knowing how much you are earning and how much you are spending. When it comes to earning, you need to be wary of what source you’re getting your money from and what other sources you can get. On the other hand, you need to know how much in total you are spending and where the money goes. Chances are you’re spending more than you earn on a monthly basis.
2. Track Expense
Now, let’s get into the specifics — how much you’re spending in total and where the money is allocated. It’s best to have a breakdown of your expenses such as the rental expense, utility bills, groceries, daily consumption, transportation, miscellaneous expenses, savings, emergency funds, and anything else you need. From there, you have to assess what the important expenses are. This leads us right into the next section.
3. Identify Spending Issues
After tracking your expenses, it will be easier for you to identify spending issues. Knowing what financial items are important vis-a-vis items of lesser importance will help you determine your financial weaknesses. Perhaps you’re spending too much on recreational activities that aren’t that important — going to the movies weekly or treating yourself to fancy dinners every other day. Perhaps you’re simply spending too much on grocery items that you never use in time. Everyone has a weak point — it’s just a matter of finding yours.
4. Stick to Your Budget
After you’ve established how much you earn, how much you spend, and where your financial issues lie, it’s time to create a budget. When doing so, you have to ensure that you earn more than you spend. This means that you may have to eliminate a few unnecessary expenses. As much as possible, allocate some to your emergency funds or savings. In fact, financial experts say it’s imperative to have a fixed allocation to your savings on a regular basis. The bottom line to all this is simple: stick to your budget.
5. Keep Going Amid Overspending
There are cases where you might have to overspend due to an emergency. Let’s say that you’ve been rushed to the hospital, an appliance broke down, or unexpected bills came up. You may have to shell out a little more. Even if you didn’t encounter an emergency, there are times when you may not have been able to stick to your budget. Before you get discouraged and give up, try again! Keep going with your financial budget and goals. Don’t be tempted to stop and try again next month. Forming the habit of budgeting and saving up takes time. Once you’ve mastered it, however, it will help you in the long run. In due time, you’ll get to enjoy financial freedom!
6. Use Financial App or Software
When it comes to financial tracking, there’s a wide array of apps and software out there that you can use. Some of these apps are so advanced that they can go as far as showing you graphs and charts of financial trends. They can even automatically do the math for you, instead of forcing you to calculate the numbers and figures manually. You can even track your expenses using your mobile phone synced with the software on your computer. Financial software can make your life significantly easier, so take advantage of living in the digital age!