How to Track Expenses in 3 Easy Steps!

Everybody aims to save money, especially during a pandemic. With the prices of commodities spiking, it becomes more difficult to budget your monthly salary. It is for this reason that you need to learn if not remind yourself how to track your expenses to allot your money for your needs and not for your wants.

With proper tracking, you gather insights about your behavior as a consumer. Plus, you can save more to accomplish your financial goals. Here is a three-step guide to track your expenses and never fail at budgeting again.

1. Create a budget

Many people associate the term "budget" as a fun killer. When people talk about it, they are often regarded as kill-joys or fun suckers. It hampers happy hour with friends and it makes you guilty when you buy things for yourself.

If you look at it closely, it's not killing the fun. It is postponing fun. Budgeting makes you realize that you have other priorities other than hanging out with your friends and pampering yourself. Unless you're a millionaire, this is one of the most important things to learn.

To track your expenses, the first thing you need to do is set a goal for spending. Ask yourself how much you need to spend and how much you need to save. For example, some people aim to spend only 80% of their monthly salary. The remaining 20% will be allotted for savings or emergency funds. Depending on your needs, you can set a specific budget every month, every week, and every day.

2. Use a spending tracker

For beginners, budgeting is difficult especially if you're surrounded with temptations. During the first few months, you can use a spending tracker so you can measure your goals and compare them to your behavior. This way, you can assess if you need to cut back from your expenses or if you're depriving yourself too much. If you haven't decided on a spending tracker yet, here are the most popular applications to use:

a. Personal capital

This is an investment advisory firm that utilizes the skills of financial advisers to assist their clients in their investment choices. Aside from that, this company also provides free budget tracking software so you can connect all of your accounts to track your spending. Every week, you will get an e-mail that indicates how well you are doing and saving money. This way, you can see if you need to make up for your expenses or maintain your rate of spending.

b. Tiller

This is another expense tracker that makes use of a worksheet so you can create your budget and track your expenses. This app allows you to connect your bank accounts so it can pull information and gather data to show how much you're spending. It also gives you an insight about whether you have to reduce your spending or increase your budhget for the month.

c. YNAB or You Need A Budget

This is online software that believes in the principle that everyone should learn to budget one month ahead. While this is more complicated to use than other software, you can get ahold of it the more use it. With patience, you can see how effective it is to help you track your expenditures and save money.

There are various applications you can use to budget and tracker expenses. If these three do not work for you, you can try more software such as Pen and Paper, Wally, and Mint. Depending on your preference, there are thousands of apps to choose from.

3. Set Check-ins Weekly

This is the last but not the least stage of budgeting your money. Once you found the tracking system that suits your preferences, it is important to set financial check-ins. This allows you to get a clear picture of your expenditures each week. From here, you can decide if you need to cut back. If so, proper adjustment is necessary so you can budget your money properly and save more.

If you're struggling with budgeting your expenses, do not give up. Remember that budgeting does not exist to restrict you from having fun. In fact, it makes you feel more in control over your money. It allows you to track your expenditures to know exactly where you allocate your funds.

Budgeting also gives you an idea if you're spending too much on fads rather than your priorities. This way, you can cut back from spending on things rather not as important to you. With patience and determination, you can see and feel the positive effects of sticking to this good habit. After how many months, you can see how much you've saved and you'll be proud of yourself for starting in the first place.