Take back control of your money…
Have you ever tried to eat more healthily by keeping a record of everything you eat? If you have, you’ll know that sometimes the results can take you by surprise and you don’t actually realise how many biscuits you’re scoffing with your tea until you see it written down. Well, budgeting is the same – you probably have no idea how much you’re really spending on the daily coffee run or frittering away on your lunch break until you actually track the data. Just as a food diary allows you to monitor your diet, noting down all your spending habits will help you discover where your money is really going. If you want to start keeping track of your spending, follow these simple tips…
Choose a time period
To get a true idea of your spending habits, we’d recommend tracking your spending for two weeks to one month so you can get a clear idea of exactly what you are splurging and where. By tracking your spending you can also start to put together a budget and keep on top of your outgoings every month – don’t forget to keep checking back to make sure your spending habits actually line up with the ideas you’ve outlined in your budget, though!
In order to successfully track your expenses, you need to know exactly what’s going where – and why. Broad categories such as ‘car expenses’ or ‘pets’ make it easy to forget the little things – and it’s the little things that really add up. Instead, try and make sure you note down every last detail, from pet food to insurance and cat litter to treats, so you can have a full overview of exactly where your money is going.
Write it down
Make sure you always ask for your receipts and keep a small notebook in your bag – or make a note on your phone – so you can jot down every transaction you make. Writing everything down will not only ensure you have a detailed record of exactly where your money is going, but it will also make you think harder about each expense and help you to become more conscious about your spending habits.
Stop using cash
If keeping a physical record of every penny you spend doesn’t appeal to you, you could always stop using cash completely. After all, you already have automatic electronic records for every credit card, debit card and online transaction – in fact the only type of transaction that isn’t recorded is cash. If you stop buying things with cash, you’ll spare yourself the hassle of having to manually record your spending and have an electronic record ready to view instead.
Unless you need to track your cash
It’s all very well and good to stop using cash – unless you’re the type of person who flashes the plastic and finds it hard to track your digital spending, in which case you should most definitely stick to physical money. If cash is king for you, you could always withdraw a certain amount to last you for a week and make sure you stick to it so you still have a clear idea of your cash flow.
Try the envelope system
At the beginning of each week, fill a series of envelopes with money which you can divide into different categories – for example, ‘lunch’, ‘petrol’ and ‘misc’. This is a really easy way to track your cash as you’ll be able to see your spending habits in broad categories, as well as if you need to move some money across from one envelope to another one so you can start to identify patterns in your spending as well.
Use an app
Another great way to keep on top of your spending is to use an app to track everything that goes in and out of your bank accounts by taking details of your spending and organising them into categories. There are tons out there, from Mint and Money Dashboard to Monzo and more. Just remember to read the reviews and check the ratings before you make a decision – and keep an eye out for add-on tools you might have to pay for, too.
Once you know where you’re spending your money, you can start to prioritise what’s important to make sure you stay within your means.
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