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Did you know, according to Business Insider, only 39% of U.S. adults keep track of their money? If you’re not paying attention to your spending, it will be much harder to achieve your financial goals. Find out some easy ways to track your monthly spending.
How To Track Your Monthly Spending
Once you make a budget and allocate where your money is going, you need to track your spending.
Related Article: How to Make a Budget For Beginners Worksheet
Tracking your spending is important because it allows you to check your progress. Tracking how much money you earn versus how much you spend—and where it’s being spent—is the key to making smart financial decisions.
You have to start by writing everything down. First, list your fixed monthly bills—such as your mortgage or rent, car note, cell phone, Internet, and cable bill—on a piece of paper, in a spreadsheet, or a worksheet.
Next, track your discretionary spending—such as groceries, gas, dining out, clothes, entertainment, personal items—by keeping receipts and writing down all of your purchases. You cannot rely on your memory to keep track of your spending.
Use this FREE Daily Expense Tracker to help you with that. Print out multiple sheets (one for each spending category or sub-category). Then put all your sheets in one place (like a binder or folder).
I recommend logging your receipts and purchases right away if possible, or at the end of every day. If you wait too long to log your spending, you will end up with an overwhelming pile that is easier to put off. Make a note in your phone or on a small piece of paper as you spend throughout the day. Then write the numbers in your expense tracker at the end of the day.
If you use your debit or credit card for your discretionary spending, you can easily track your purchases through your bank’s website or a third party website like Personal Capital. Remember to also keep track of any cash you may have spent since this will not be on your bank statements.
I Tracked My Spending, Now What?
Now that you know how to track your monthly spending, you may be wondering “now what?” Once you have recorded your spending for the month, add up all your spending in a category or subcategory. Plugin the numbers from your daily expense tracker (or whatever other method you use to track your spending) into your monthly budget.
If you’re just starting out, you can download my FREE Monthly Budget Worksheet.
However, if you want to get serious with tracking your spending and need something a little more sophisticated, you can get my Budget Templates. These are the templates I used to save $300,000 in 4 years and it is the same templates I use to this date.
Once your numbers are plugged in, take a minute to review the numbers. Sit down and compare the actual expenses versus your budgeted expenses. This will show you where you did well and where you may need to improve.
Make Adjustments Where Necessary
At the end of the month, use the information you’ve gathered to make any necessary changes to your spending habits or your budget. Are you saving enough money? Are there any areas where you can cut back?
If you spend more than you budgeted in a particular area, figure out why you spent more. Maybe your budget in that area is not realistic and you need to make adjustments, or maybe you need to figure out ways to cut your expenses in that area.
So don’t let a month pass without reviewing your budget.
Tracking your spending is an important step towards financial freedom. Now that you know how to track your monthly spending, lets quickly review what you need to do. First, write down all your fixed expenses and daily purchases. At the end of the month, plug in your total spending for each category (or subcategory) into your monthly budget. Finally, review your numbers and make adjustments where necessary.
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