If you’re aiming to gain control over your financial status and get your money management skills in check, the foremost step is to understand your expenditure. The role of monitoring your expenses is crucial as it provides a crystal clear picture of how your money is being used. Many people overlook the importance of tracking their expenses while planning their budget which can lead to unrealistic financial planning. It might be daunting to discover your real spending habits, but it’s an essential step towards good financial health.
Understanding your expenses allows you to set realistic financial goals and develop beneficial habits.
PAST METHODS OF EXPENSE TRACKING
Previously, people often relied on keeping their checkbooks balanced, saving paper receipts throughout the month, and entering every detail manually into a system. This method was not only tedious and time-consuming but also prone to inaccuracies, particularly when receipts were misplaced or a paper tracking system was revamped. Considering these ongoing issues, following such methods nowadays could be too daunting and might lead to a sense of frustration.
Thankfully, efficient and digital methods now exist to make expense tracking less tedious and more accurate. The beauty of modern fin-tech tools is the convenience they bring to money management tasks.
Here are a select number of convenient programs recommended for simple and painless expense tracking:
PERSONAL CAPITAL
The Personal Capital program is a highly-regarded wealth management tool. Its usage comes free of charge, and it enables you to synchronize all your accounts, including checking, savings, credit cards, loans, and more, in just a few seconds. The program uses this amalgamated information to provide you with an automatic calculation of your net worth, as well as tracking your cash flow whenever you connect your checking account(s). This means you can effortlessly monitor your spending habits and understand where your money is being spent.
MINT
Another expense-tracking program is Mint, which emphasizes budgeting by monitoring your expenses. It does not chiefly focus on calculating your net worth. Mint allows you to effortlessly and automatically link all your accounts for easy expense tracking. Despite customization being needed to achieve more accurate spending categories, automatic expense tracking does save your time. As a bonus, Mint also allows users to check their credit scores for free.
EVERY DOLLAR
Every Dollar operates as a budgeting application designed to help users apply Dave Ramsey’s Baby Steps. It offers both free and paid versions. It assists you to determine your expenses and budget categories based upon your income. An inherent function of the app is to monitor your expenditure automatically and visualize it in comparison with your budget.
YOUR BANK ACCOUNT
The use of your bank account for expense tracking could be the most convenient option. Some banks offer in-built expense tracking systems. For instance, Huntington Bank, predominantly based in the Midwest, provides an expense tracking feature known as Spend Setter. This feature allows you to manually create budget categories and track your spending in those categories throughout the month.
SUMMARY
Expense tracking need not be burdensome or time-consuming. Making it simple can keep you motivated to continue monitoring it. Most people lack the patience or the time to manually track their expenditure daily. Even those who prefer manual tracking find it easier to do weekly for better manageability. Over time, you will get insights into your spending routines and will derive a sense of satisfaction knowing that every dollar of your income is well accounted for.
