You have a budget, great! The next step is tracking and monitoring your spending to ensure you are actually following that budget. There’s a misconception that if you have a budget, that’s the extent of your financial responsibilities. That is far from the truth! Alongside your budget, you should have a system in place to ensure you are fully aware of where your money is going. If you don’t believe us, keep reading. The CGS Team is sharing 5 reasons why you should start tracking your spending.
#1: Track to Ensure You’re Following Your Budget
When you first start on your expense-tracking journey, the primary reason to do so is to make sure you are following the limits that you gave yourself in your budget. If you don’t track your spending, you aren’t 100% sure where your money went. You may have a good idea, but that doesn’t warrant control of your spending. Knowledge warrants the control.
#2: Track to See Exactly Where Your Money is Going
If you track your spending and see that you are going over the limits you set in your budget, now you can see exactly where you’re overspending. Tracking your spending allows you to see exactly where your money is going. Did you overspend on food? Did you go shopping one too many times? You are now able to answer these questions and hopefully make some changes.
#3: Track to Break the Paycheck to Paycheck Cycle
When you set a budget it and track your spending, you are taking control of your financial situation. You can see exactly where your money is going and consciously fix any spending overages. Once you see where your money is going, you can start to break that dreaded paycheck to paycheck lifestyle. Cut back eating out, shopping and activities for a few weeks to build a buffer in your account. By tracking your spending and referring to your budget, you should know exactly what you need in your account to break that cycle.
#4: Track to Set Your Priorities
Once you set your budget, track your spending and break the paycheck to paycheck cycle, you can set your priorities. Do you want to take an exotic trip next year? Do you want to buy a new car or home? Now that you see where your money is going and fix any overspending, you can set some financial goals and priorities, and start budgeting for them. Instead of spending an extra $50 a month on food, you can open a new savings account for your goal and contribute monthly to that account. When you are in control of your money, you can give it a place to go.
#5: Track to Catch Questionable Charges
Tracking your spending allows you to keep a close eye on all of the charges that take place on your credit card, debit card or cash. If you notice any questionable transactions that you didn’t make, you can take the proper steps to get answers (and hopefully your money back)! You will only be able to catch questionable charges if you are monitoring your accounts and tracking what you really did spend.
Related: 7 Signs You Need a Money Coach
If you have a budget, the next step is to track your spending. Make sure you are doing your part to better your financial situation! Do you track your spending and expenses? What system do you use to track your expenses? We want to hear what works, and what doesn’t work for you! Leave a reply below to share!