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Don't Let Expense Tracking Drain You

One of the best solutions to many money issues, especially those pertaining to cash flow, is to track your spending. If you can’t figure out why ends don’t seem to meet, tracking your spending for a month or two can help. Or, if you’re looking for places to cut back so you can accomplish other goals, watching what you spend can help you identify those areas.

If you’ve ever counted calories as part of diet or weight loss program, then you have a pretty good idea of what expense tracking its like. It’s tedious work, but don’t make it too hard for yourself. Otherwise, you might burn out and give up before you ever get to review the results of your hard work. Here are some tips to make expense tracking a little easier.

Don’t write down every purchase right as you make it. Several personal finance books and blogs have recommended that you carry a little notebook with you and write down all your purchases as you make them. This is to be sure you don’t forget anything. If you think you’ll forget, you might go ahead and do this, but there are easier ways. For one, you can keep all your receipts tucked away in your wallet or purse, then write down the amounts at the end of the day or week. Or, if you primarily use your debit card account, you can download the transactions from your online account.

If the thought of keeping track of every penny for the rest of your life scares you, commit to doing it just for a short period of time, like a month. That should be enough time to cover all your bills and a typical month of expenses. You might do it an additional month for comparison, especially if you had unordinary expenses during the first month. You can choose to track your spending beyond the first month or two, but at that point you’re really tracking to remain disciplined in your spending, which is fine as long as you don’t get burned out and miss the key lesson.

Make it part of your routine. Choose whether you’re going to do your tracking daily, weekly, or some other frequency. Then, figure out how you’re going to fit it in with everything else you do. Maybe you’ll do it at after dinner or just before bed every evening. Or, you might choose to track your spending Saturdays after breakfast. Once you’ve set aside a specific time for the task, you’re more likely to get it done. Saying you’ll get to it “at some point” or whenever you “have a chance” creates a risk of it not getting done.

Be realistic about the purpose of your expense tracking. You’re doing this for a great reason – to ultimately make better use of your hard-earned money. Track your expenses for a month and you’ll learn one of two things: you’re already doing an excellent job managing your spending or there are some areas that you can improve. Either way, you need to know. You can either pat yourself on the back or come up with a plan to do things better.

Many people find that they don’t have to religiously track their spending beyond the first few weeks or months. Once you learn to control your spending, you may check up every few months to be sure on track. Outside of that, the hard work of watching every penny won’t be necessary.
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Tuesday, 14 July 2020

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