Do you write a checque for everything you buy?
Are you a cash only type of person? or…
Are you like me and you live and die by your debit/checque card? 🙂
Regardless of the method you use to make your purchases, it is important to not only know what was spent, but what was purchased. When you can determine where your money is going it helps to accomplish a few different tasks at one time.
The first advantage to tracking your spending is that you can visually see how much you are spending on a particular item. And just by tracking your spending on that item, you almost subconsciously immediately start making an effort to control your spending and thus saving you money.
Secondly, by tracking your spending you can effectively set up a savings plan that will help you avoid financial disasters. The saying, “Plan for the unexpected!” fits very appropriately here. Having savings means you are ready in the event of something expected happening, which almost always case. Ever suffered that car breakdown in the middle of the month when you are barely holding on and waiting for month end? Imagine how great it will feel if you find yourself in such a situation and some savings you had kept can come in to save the day.
Tracking your expenditures will also lead to better money management. You will know exactly where you stand financially. This is very helpful in avoiding or reducing overdraft fees and other associated bank fees.
Check out >>>> 5 Steps for Tracking Your Monthly Expenses
If your bank requires that you keep a minimum balance in your checking account, *you* will know when you are approaching that limit and can manage your money accordingly.
Lastly, tracking can lead to peace of mind. Meaning, if done right, you can rest at ease knowing that you have a strong grasp on your finances. Even if you are not debt free, by tracking your spending, you can create a plan that will lead you out of debt and eliminate the stress that comes along with it.
These are just some of the advantages of tracking where your money goes. Of course, for every one there may be even additional advantages that we didn’t mention here. Most important is just doing it or having an Accountant who can help you keep track of your spending among other things. If nothing else you can save money, avoid costly fees and be prepared for just about any financial disaster that may happen.
