Introduction
Before you become expert in handling your money, you have to know how to spend them. If you want to get financial happy and make it grow you have to keep tracking your spending and find the way to save them. Here we will talk about how you can track your spending and find better way to save money.
1. What You Need to Know About Your Money
Before you start tracking your money you have to know about your present money. You have to add your salary and other incomes for start tracking. This means you have to know about your total incomes, spending, bills and long term financial goals. After knowing your all incomes you have to make a list of your expenses. You can do this task with hand or also take help form any kind of tool.
2. Using Tools for Financial Management
Nowadays there are many applications and software by which you can track your spending. Mint, YNAB, good budget and pocket Guard these are the most popular and accurate app which can help you a lot to track your money you can also link your bank accounts and credit cards with these applications. These tools will tell you about your spending in digital ways which make easy to find your unnecessary spending and help you to save money from them.
3. Setting up a spending plan
The most effective way to track your spending is through making budget. Make a budget that will help you in your financial planning like what to spend, what to save and also track your money. The first thing that you have to do is dividing your costs into two groups like set costs and changeable costs. Set costs are those which cant be ignored like utilities, rent and loan payments. Changeable costs are those which are easy to change and flexible like groceries, entertainment and dining outside.
50/30/20 rule
50/30/20 is the most common and effective way to create budget. In this budget you can spend your 50% income on your important needs, 30% on your desired wants like entertainment, dining out and trips and 20% income will go for saving and paying your debts. This method will give you clear and easy road map to handle your money in reasonable way and spend in good manners also make sure that you save some amount and pay your debt.
5. Keeping track of daily costs
If you want to know about your spending then you have to track your spending on daily basis for at least a month then you will come to know about your real value of spending. For this process you can use simple ways like notes, note book, worksheets and digital applications to do this task. You have to write every single buy whether it can be small or big. Look at your utility bills at the end of month and find the place from where you can save money.
6. Looking at how you spend your money
After getting details from your monthly observation then look at how you spend your money. Then you have to divide your costs into different categories like utilities, groceries, transportation, dinning out and entertainment. After observing this you will come to know about your loop holes and can make changes to save your money.
7. Finding Ways to Save Money
Once you come to know about your real spending then you have to make a plan or look for ways to from which you can save money. These are some effective ways.
1. Food and Groceries:
Going out for groceries and having lunch in expensive restaurants can add up. You have to control your self from dining out and buy grocery from promotions. When you go for groceries you have to make a detailed list pf important things that you need and stick to it. You have to cook your meal at home and avoid eating out.
2. Memberships and subscriptions:
You have to look at your memberships and payments. You have to cancel that membership which is not in use they can be gym, streaming services and paper subscription. You can use free and cheaper options instead of having costly memberships.
3. Utilities:
For reducing your utilities you have to reduce the usage of electricity, gas and water. This will help you a lot in saving much money. You can use tools that consume less energy like LEDs and plug out things which are not in your use. You can feel great change in your bills by switching off unnecessary fans, lighting and maintaining temperature.
4. Transportation:
If you use your personal car for transportation then it can charge you more. For saving money over gas and maintenance you have to use public transportation like bus and you can also use share ride and use bike. If you have more then one car then look at its usage if it is not much then you can sell it. You can reduce your costly fixes by regular upkeep.
8. Putting money away for the future
For having good and reliable life you have to do more than just savings. You can get much money by investing it rather than just putting it in bank accounts. You can invest your money in stocks, bonds, mutual funds and also in saving accounts like IRA and 401 k these are best accounts which will help you in your retirement with much other benefits. You can spread your risks by investing in different kinds.
9. Looking for Professional Help
If you can’t able to handle your money by yourself then you can take help from professionals and advisers. A good financial planner will give you good plan for your money which will help you a lot in managing your money. It can also give you advice on investment and help you to achieve your financial goals.
Conclusion:
The most important thing about your money is keep tracking your spending and looking for good ways for savings. You can easily handle your money by observing your situation, using applications, making budgets and by investing. Keep reviewing your budget over time and if any kind of changes required than make it quickly. You can also take help from professional if you want. If you are disciplined and consistent to your budget then you can achieve your desired results.
FAQs
Why is it important to keep track of how much I spend?
Keep tracking your spending will help you to find out where your money goes. This habit will also find loopholes where you spend unnecessary money and also find ways of savings. It is very important to make budget and keep tracking your spending to achieve your goals.
2. What tools are there to help me keep track of my money?
There are many tools in market which can help you to reach your goals like mint, YNAB, good budget and pocket guard. These applications can also link your bank accounts for more accuracy.
3. How can I find places in my budget where I can save money?
You can find many places in your budget by observing it carefully. You can find over spending in different places like dining out, memberships, bills and transportation. Look for ways to reduce expenses and get rid of spending that are unnecessary.
4. What does the 50/30/20 rule mean when it comes to budgeting?
The term 50/30/20 means that you have to spend 50% of your income on your needs , 30% portion of your income can be spend on wants and the rest of 20% income will go for savings, in your retirement accounts or for paying your debts.
