Best Solutions for Tracking Monthly Expenses
Where did all your money go? And what do you owe your roomie? What does your flatmate owe you?
Use our helpful tips on tracking monthly expenses to make smarter financial decisions, manage joint expenses, pay your debts and see how easy it is to live budget smart.
Money isn’t everything, but it sure does affect many aspects of your life. So, the better you can manage your budget such as tracking monthly expenses, the more your life can improve. For example, having a little extra cash to pursue a hobby, join the gym or afford healthier meal options can transform your quality of life.
Unfortunately, many people find it easier said than done. As you may experience at the moment, spending money is easy and it only takes a few unplanned purchases to ruin your budget for the month. Or perhaps you simply can’t remember who owes you for Friday’s restaurant meal where flatmates and all your friends joined in.
Let’s show you easy solutions for tracking monthly expenses that will solve many of your financial woes. You can be on track living money-smart in no time.
Is Expense Tracking Really Important?
If you’re earning a large paycheck, you may not track every single expense. But even millionaires would tell you that part of their success story is learning how to manage money properly. Financial freedom is often the result of recurring smart decisions, not a quick, overnight achievement. Expense tracking helps prevent overspending and guides you in making smart financial decisions on a continual basis.
Benefits of Tracking Monthly Expenses
Tracking monthly expenses is also important in order to have a source of information to discuss with other relevant parties. For example, you may need to discuss your budget with your spouse. Or perhaps you and your roommate must sit down and talk about expenses you both are responsible for. If you don’t have a system in place, managing your finances will be chaotic, if not impossible.
Other benefits of tracking monthly expenses and all your income streams include:
- You can track your financial journey and make adjustments if necessary. This is vital to one day be able to retire comfortably. Also, seeing the positive results of wise choices will keep you motivated to continue.
- Keeping an eye on your bank balance and comparing it to your budget will alert you of fraud. For example, someone can steal your identity and access your bank account. Tracking expenses forms part of managing your financial security.
- Avoid unnecessary stress by staying in control of your finances and not spending more than you can afford. Also, instead of stressing about whether you have enough cash left over for the month, you’ll always have facts available.
- When you know how much cash your spending has left you with for this month, you’re less likely to overspend on impulse.
- Having an overview of your spending can help you pinpoint areas where your habits are causing you to spend more than you should. Then you can start saying ‘no’ to eating out so much or buying gadgets you never use.
- When you make smart decisions, you’ll create less debt. Also, fewer people will owe you money, because you’ll know exactly who still needs to pay up.
- Your budget will be realistic because you know exactly what you pay for regular expenses.
- When tax season comes round, you’ll have the necessary information on hand to apply for tax benefits.
See how smart it is to keep an eye on what’s going on in your bank account by efficiently tracking monthly expenses? Motivated to take a little control of your money?
Here are easy ways to try out.
5 Money Tracking Techniques to Try
You need to figure out an expense tracking system that suits you. For example, older generations may not be comfortable using the latest tech like an iPhone app for chore and bill tracking. For them, old school methods will be preferrable. But after moving out of your parents’ house you may want other financial habits than you saw them use.
So, what will work for you? Remember, in your life you have a unique situation, habits and preferences. Here are some options to consider.
Pen and Paper
Nothing wrong with using classic bookkeeping methods! A book and pen can help you keep track of spending and you simply need to log each receipt and file it safely. Just remember you need to keep each invoice or receipt and not misplace them. This system requires meticulousness and good habits.
Some people find this process beneficial because the action of writing down each expense—rather than typing on a keyboard or mobile device—will make you think about that purchase. Perhaps you need to make a decision to keep certain types of expenses to a minimum? Also, writing out budgets on a piece of paper can be therapeutic by helping you identify areas you’re worried about. Then you can revise your budget to benefit your cashflow.
This is a more laborious method to use and if others—like a partner or roommates—must help you manage your budget, hopefully they’re good at safeguarding their receipts too. If not, it will be difficult to have an accurate record of expenses in the household.
You can capture your budget and expenses on a spreadsheet. It is easy to share with others via email or cloud storage and the software does all your calculations for you. Online resources make it easy to get started, thanks to free templates for budgets. You can also access it via your mobile device for on the go budgeting and expense capturing.
Unfortunately, not everyone enjoys working with spreadsheets. Therefore, you may not have everyone’s buy-in when managing your home or flat’s budget with this method. You’ll be stuck updating everyone’s spending, or the data will often be outdated, instead of giving you a real time view of your available cash.
To make sure you don’t spend cash that you don’t actually have, put budgeted amounts aside for each expense category at the beginning of the month. And we don’t mean just making a list! Physically draw the cash and place the budgeted amounts into separate envelopes, labelling them for each expense type, such as:
- Cleaning products
- Car service
- Entertainment and eating out
Now you have to be very disciplined! Don’t take money from one envelope to cover another expense—or tell yourself you’ll save a bit on transport so you can pay for a new outfit you can’t really afford.
The biggest benefit here is that seeing the pile of cash diminish throughout the month will prompt you to curb spending on expensive food items or takeaways. The reality stares you in the face, unlike when swiping your bank card and being able to ignore the reality of your bank balance for a few days.
However, these days it’s not practical paying with cash all the time. You may use online shopping or feel unsafe carrying a lot of cash on you.
Technology is supposed to make our lives easier and that’s the case with budgeting apps and mobile software that helps with tracking monthly expenses.
Firstly, your expense tracking method is almost always on hand, since you probably have your mobile device with you all the time. So, when in store, quickly check your balance and make an informed choice about whether you can afford something or not.
Adding the new expense is quick and easy, thanks to a few clicks. Apps can even scan and save receipts, so it doesn’t matter if it gets lost in your bag or blows away. Even small expenses like parking can be added, so you have an accurate overview of your expense categories. Because let’s be honest, those small expenses can quickly add up!
Also, it’s super easy to share the information with others or ask them to join you in using the app. They can add their expenses and with apps like Enzo you can view summaries of who owes who. That’s good news for families and roommates who want an effortless way of tracking monthly expenses that everyone must help cover.
Use overviews to see your spending habits and make smarter decisions next month to bring you one step closer to financial freedom.
A Quick Comparison
|Pen and Paper||Therapeutic Focus on the facts||Takes time Receipts often get lost|
|Spreadsheet||Automatic calculations Easy sharing||Other parties less likely to participate in budgeting Easy to get outdated|
|Envelopes||Have a real time view of financial position Less chance of spending on things you didn’t budget for||Paying cash isn’t always relevant or possible Safety issue|
|Apps||Budget always on hand Receipt scanning for accurate record keeping Easy sharing with others Real time data Analytics||Some apps require payment Low buy in from older generation|
Efficient Expense Tracking Benefits Your Life
And that’s what expense tracking is about: helping you manage your money NOW, so you can have peace of mind you’re benefiting your future. From settling accounts with your flatmate and avoiding unnecessary conflict, to empowering you to save a little more each month, healthy budgeting habits are important. And expense tracking is one of the most essential habits to have.
Our team can show you how to best implement it, so why not contact us today?