Tracking your expenses is a critical aspect of financial management. It involves identifying and categorising your expenditures throughout the month. It is an essential activity which every individual should carry out frequently to ensure a budget is stuck to, and set financial goals are achieved.
If you do not know how much you have spent each month, you cannot tell when you have overspent or if you have been affected by hidden bank charges, fraud or wrong financial decisions which can affect your savings and budgeting for every other month.
With gomoney, tracking your expenses is easy and simplified as all your expenses are categorised and your spending is monitored with your earnings to enable you to know when you overspend or when you are earning more money than you spend.
Want to know how you can track your spending and reduce bad spending habits? Follow these steps below:
Categorise your spending: The first step to successfully tracking your expenses is to categorise them into related categories. Categories could include; transfers, entertainment, bills, groceries, and many more. By categorising your spending, you can know what category you spend money on the most or the least and make adjustments if necessary.
Monitor your spending report: To stay on top of your spending, you need to constantly review your spending reports. With reports, you can see how well or how bad you are doing with your spending and identify where you need to cut expenses in order to stay within your budget and meet your financial goals. It is recommended that you should monitor your spending report at least twice a week. It can help encourage you to change or maintain your spending habits.
Continue to monitor even when you overspend: It is really tempting to want to stop tracking your expenses and start again the next month when you overspend. But that is not an advisable approach as this will probably always continue and you will not have control of your finances. Overspending sometimes can be caused by inflation and change in the prices of some expenses. With monitoring, you can make adjustments to your next month’s budget and your financial goals and expectations. Don’t ask God “why me” when you are not being responsible enough.
Create a stash for each expense: You can take advantage of your stash to not only save towards financial goals but to create an envelope budgeting method. With an envelope budgeting method, each month, you can stash away money for each budget category from dining out, entertainment, groceries, clothing, gas, etc. This helps you keep the money out of site from your account balance and you are able to stick with your budget by withdrawing from each stash when it is needed.
Stick to your spending limits: If you spend less than you budgeted in a category, reward yourself by adding it to either your savings or emergency fund. Should you overspend, try not to take money out from another stash. If you do that, it will affect your spending in that category which will have a ripple effect.
They say “money is slow to enter and money is quick to go”, indeed. It's very easy to spend a lot of money when you're not paying attention.
Long-term financial health takes a lot of careful planning and discipline, and tracking your expenses helps you ensure that you're on course. Otherwise, you'll always be thinking you are being followed by your village people.