Ways To Keep Tabs On Your Spending To Control Personal Finances

Getting to grips with spending is hard for many people. Many tiny expenses slip through the cracks, and at the end of the month, when you calculate figures, they do not add up to what is left in your pocket. The only way to be on top of your expenses is to jot down every tiny expenditure. It may sound boring and tedious, but that is how a cookie crumbles.

There are two main ways you can keep track of your expenses. One of them is manually recording your expenses, and the other is using a budgeting app. Bear in mind that a budgeting app is not a magic wand that you simply wave, and it automatically records all transactions you make throughout the month.

A budgeting app records transactions in one place if you make them using a debit card or a payment app. Of course, you will have to record each transaction if you make payments through cash.

Ways to keep tabs on your spending

Here are the ways to keep tabs on your spending:

Manual tracking method

Most people find it boring, but even if you use budgeting apps, you will have to put in a bit of effort to record a few transactions.

• You should consider all expenses. It is a good idea to list them in a category to know which one is using up a large chunk of your budget.
• Make sure that you note down every tiny expense. Note them down as soon as you incur. Some people tend to note them down once a week or in 15 days. It is hard to remember where you spent money on the previous day.
• Use a notebook to record each transaction. Note down each category expense in different ink. For instance, travel expenses should be written down in pink ink, and food bills should be written down in blue ink.
• Record all these transactions on a computer-based manual spreadsheet and tally it with your diary spreadsheet at the end of the month. It will help you double-check your monthly expenses.
• Every month, you make deposits and withdrawals. You will find particulars in your chequebook to help you record deposits and withdrawals throughout the month. The deposits and withdrawals should match and tally with your account balance.
• At the end of the month, calculate the total amount and see how much you are left with. Does it tally with your account balance? If spending exceeds income, you should whittle down your expenses. Chances are you are using 24loanswales to fund emergencies because of greater outgoings than incomings.

A budgeting app

If you cannot handle a manual spreadsheet, you should use a budgeting app to monitor your expenses. To start with, you need to choose a functional app that aligns with your goals. Various budgeting apps are out there. Understand their features and then make a decision.

Most of the budgeting apps are free of cost, while others require a subscription to access premium features. Some budgeting apps are exclusively aimed at debt management, savings and investing, while others are aimed at only one of these features. For instance, if you are out of work and need loans for people on benefits, you may have to use a budgeting app that helps you with savings as well as debt management.

• Having chosen a budgeting app, you will have to link it to your account. It will pull in information on all your accounts, including investing and retirement accounts. Note that not all apps support investment accounts.
• Transactions you make using cash will not be recorded automatically. You will have to record them manually.
• If you are a credit card user, make sure that you use it as an expense. Note it down immediately so you do not overspend. At the same time, set aside the money to be able to pay off credit card bills on time.
• You do not need to wait until a month’s end to get a full picture of your finances because you will have full clarity of how much you have spent and how much is left in your bank account.

A few money management tips you need to stick to

Here are a few money management tips to help you be in the driving seat:

• You should immediately record the amount of online purchases if you use a credit card.
• Once you get an idea of the average spending, make sure that you stick to that limit.
• Try to cut back on discretionary expenses to have some wiggle room in your budget.
• If you are already in debt, try to completely cut back on inessential expenses. The sooner you get rid of the debt, the better it is.
• Make most of the transactions using cash. It will benefit you have a better picture of your finances.
• Create an emergency cushion. It will help tide you over during financial emergencies. Make sure you set aside money for a rainy day first before using your pay for other regular expenses. You can get an idea of how much funds you should set aside every month after calculating the average monthly expenses.
• Be consistent with your contribution to a safety net. Despite a nest egg, you may need to rely on a loan. You should not borrow more than your affordability.

The final thought

It can be overwhelming to track your expenses, but it is a must to make sure that you are in control of your monetary activities. Whether you use a budgeting app or a manual spreadsheet, track down your inessential expenses and try to whittle them down.

There is no point in tracking your expenses if you fail to retain cash in your pocket at the end of the month. You may still need to borrow money, but be cautious with your repaying capacity.