Your financial stability depends on how you manage your money. Even if you earn a lot but you don’t know how to control your expenses there’s a big chance that you’ll end up with no savings. That is why it is very important to always track your expenses because you’ll know where did you spend your money and you can ensure that your money is used wisely.
Tracking your expenses also allows you to be aware of why you’re in debt and how you got there. This will then help you think about a strategy on how to get out of debt. If you wanted to know how to track your expenses this might help you.
Here Are The Ways To Track Your Expenses:
- Use Budgeting Apps
Budgeting Apps offers a convenient way of managing your expenses. You’ll be able to keep an eye on where you used your money with just the use of a mobile phone and just the app itself.
- Use a Pencil and Paper
This is the method that we used to do before technological advancement happened. This is very popular for those people who wanted to write down all their expenses the way they like it to be written because in that way they can easily check and evaluate their expenses.
- Use a Computer Spread Sheet
If you’re a techie person this will be perfect for you. Aside from it makes tracking jobs easier, it also allows you to customize your budget on the screen.
Here Are The Steps To Track Your Expenses:
Step 1. Write down your monthly income
Step 2. Specify your monthly expenses
For instance: Food, Shelter, Transportation, Daily Needs, and Savings
Step 3. Allocate a budget on your specified expenses
Step 4. Do the math. Subtract the monthly expenses to your monthly income. Make sure that it will be equals to zero to follow the Zero-Based Budgeting.
What is Zero-Based Budgeting?
This method means that if you subtract your monthly expenses from your monthly income the answer must be zero.
For example, you earn Php 20,000 a month, all of the amounts you earn must be distributed to all your expenses such as food, shelter, savings, etc.
NOTE! There’s a lot of budgeting methods out there but this one is proven effective, just make sure to allocate your money well especially in savings, then you’re good to go.
Step 5. Record your daily expenses, even the smallest amount of purchase must be written if you want to track your expenses
Step 6. Keep an eye on everything you spend. Make sure not to overspend. The allocated amount for that must not exceed what’s on your record.
Step 7. Be strict! Even if you write down all your expenses but you don’t follow them, it will be useless.
The tips above aim to help you have an idea of how to track your expenses but it does not guarantee anything.
Remember! Being able to conduct financial management is the best way to be financially stable.