How to learn to keep track of your spending
Introduction
Most of us would like to think that we have our spending under control. However with more than half of all Americans spending more money than they make, there have got to be one or two of us who are not being truthful with ourselves and more of us who could do with a reminder that we need to be better at keeping track of what we spend.
Instructions
Learning how to keep track of spending is an activity that lacks appeal for many of us. However, when we can be in control of our money, rather than having our money be in control of us, there are a lot more appealing things that we can do.
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Steps to help you keep track of your spending
- Balance your checkbook - Balancing your checkbook is just a matter of matching up numbers. Yet for as easy as this activity is, too few people actually do it. When you balance your checkbook you are able to see not only how much money you should actually still have in your checking account, but you can easily categorize where you spend your money. When you are done balancing your checkbook you will be left with lists of places where that money is spent that can tell you a lot about your personal spending habits.
- A set limit - Many people have anxiety about establishing a budget and for some even balancing a checkbook is asking too much. So a safe and easy place to start keeping track of your spending is simply to set a limit. Decide that you will only spend so much on eating out and see whether or not you meet or exceed your limit. Then simply make changes as you think are necessary in order to spend what you believe is reasonable to spend on a given activity.
- Review credit card statements - Much the same as balancing a checkbook, reviewing your credit card statement will allow you to easily categorize your spending and see where your money really goes. Keeping track of and controlling your credit card spending can be one of the most difficult spending habits to develop.
- Use a notebook - Keeping a notebook of all of the things that you buy is a good place to keep track of all your spending whether it is by cash, credit, debit or check. Try keeping your spending notebook in your car so that as soon as you make a purchase you will be able to effortlessly record the amount of money spend and the item that the money was spent on.
- Avoid using cash - Keeping track of your spending if you always pay with cash can be more challenging because there is no paper trail. Unless you are immediately recording what you buy with cash or saving all of your receipts, there is no way to account for that money.
- Keep a log of what you plan to spend and what you actually end up spending - Another idea for how you can learn to keep track of your spending is to test your own knowledge of where your money goes. Keep a log of what you plan to spend at a certain store or on an item and then record what you actually end up spending. You may be surprised at how off your guesses might be and hopefully that will give you some indication of just how strong of a hold you have on your finances.
Other tips
Hopefully you will find a method of keeping track of your money that not only works, but that you can stick to and really incorporate into your lifestyle. Also remember that as parents, our children will learn their first lessons about how to manage finances from the examples that their parents set. Make sure that you share whatever tactics work for you with them so that they too can benefit from being smart money managers.
