Tracking spending can be tedious and sometimes even a bit scary if you’ve never tracked your spending before. Once you start tracking, you may see a trend of overspending in a certain area. To make this important financial habit easier, here are a few tips to use when you track your spending.
Make sure to have a set method of tracking. If you plan to use an app, make sure you always are using that app. If you plan to use a notepad, make sure you always have that notepad with you.
Set rules that you follow. Do you want to track every micro-purchase? I think these micro-purchases like a can of soda or candy bar here and there are really important to finding bad habits you may have. You may decide to track these small purchases or you may decide you only want to focus on purchases over $5, for example.
Make sure every month that you calculate your spending and group spending into categories. You want to make sure that every month you are totaling your spending and putting them into categories. You may want to have broad categories like social activities or you may want micro categories like dining out, movies, hair, and so on. There is no point in tracking your spending if you don’t sit down at the end or beginning of each month to really see if you are overspending or if you are right on track.
