Track Your Spending Habits

Have you ever wondered where all of your money goes?  Why don’t you have enough money to pay a certain bill?  Is money tight and the end of the month is a stretch?

One of the best ways to determine where you money is going is by tracking your spending habits.  This is a technique that I have to turn back to time and time again to keep myself in check.

I like to do mine for a month at a time, but you could also do this for one week at a time.     expenses

First I choose a notebook to record everything I purchase for that month.  {You can also do this in Excel or on your iPhone}.  I record all of my transactions, whether cash, debit card or credit card.  In my register I record who the transaction was to, the date, the amount, the type of payment {cash, debit, or credit} and what the transaction was for.

At the end of that period I go through and tally up my expenditures for that month.   I look at how much I spent on food, gas, utilities, rent and other expenses.

Next I access the necessity of these expenditures.  Am I eating out too much?  How much did I spend on a latte out?  Did I really need that item?   Could this transaction have waited?

Follow the Money
Follow the Money

These are all questions that I ask myself, as I comb through my expenses.  By tracking these expenditures, I am able to be honest with myself about my finances and how I’m really doing.  I can also find the fat in my expenses and trim that away in order to save money each month.

Sometimes life gets in the way and I am not able to track my expenditures on a monthly basis.  By making a plan to do this on a quarterly or semi-annual basis, I am able to continue to monitor myself and see the areas in which I’ve grown and the areas that still need some work.

Would you commit to tracking your expenses for the next month?