Does tracking your spending sound about as fun as going to the dentist? We get it. But just like the dentist is important for your oral health, tracking your spending is important for your financial health.
Obviously recording your spending identifies where you overspend, but there are plenty of other reasons too.
You can say you want to save for specific goals all you want, but if you don’t do it, you’ll never reach your goals.
Recording your spending provides visualization of where your money goes. You can see ‘gosh I spent $50 eating out and now I can’t save for my XYZ goal.’ That accountability is HUGE when you’re trying to meet financial goals.
Discover Bad Spending Habits
We all have them, so they aren’t anything to be ashamed of, but you must uncover your bad spending habits. When you record your spending, you see where every dollar goes. Those impulse buys, shopping sprees, or even money spent on entertainment might not feel so good when you see it on paper.
If nothing else, it may force you to pause before spending, which is a good habit to get into.
Learn to Save more Money
When you see where your money goes, you may pivot your priorities. For example, you love going to the hair salon twice a month, but it eats into your ability to save for your dream vacation. You realize if you cut out an appointment a month, you’ll reach your vacation fund goal that much quicker.
Even if it’s not something that drastic, you may find little ways to cut back so you can save. For example, cutting the cord on cable or using coupons at the grocery store can save as much as $100 or more a month. If you set that money aside in a savings account, you’ll reach your goals.
Create more Financial Security
Not looking at your finances often creates instability, puts you at risk of fraudulent charges, and makes you feel unorganized.
Wouldn’t you rather know where your money goes? It’s not a blame game or meant to make you feel bad. Seeing where you spend your money is eye-opening. It also alerts you when someone else hacks into your account or uses your credit card without your knowledge.
Rather than chasing your tail all the time, you’ll know what’s yours, what’s not, and what must change for you to reach financial security.
It’s Time to Record your Spending
Don’t look at recording your spending as a chore. It’s empowering and when you do it enough, it will become a habit you’ll enjoy because you’ll feel in control of your finances once again.