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Is It Important to Track My Expenses?

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Question: Is It Important to Track My Expenses?

 

It really is important to keep track of how you are spending your money. It is the first step to understanding how you are managing your money, and to taking control of your finances. It may seem like a lot of work when you first begin, but you can make it as simple or complicated as you want to.

 

Answer:

An easy way to track your expenses is to simply write down every penny that you spend and where you spent it in a notebook. You may want to make a page for each budget category or simply put the category next to the amount you spent. This gives you a quick look at where your money goes, although it may be more difficult to separate the money into categories or look at spending trends. It at least makes you more aware of where your money is going.

Another really easy way to track your expenses is in any financial software program. The programs can show you fancy graphs and charts to illustrate your spending habits. It is simple to enter the purchases in a budget category at the same time you enter them in your checking account.

The real reason you track your expenses is to great financial awareness. If you don’t know where your money goes or how you spend it, you won’t know what habits you can change in order to make your money work for you. Those who become millionaires are aware of the money that they make and that they spend. True wealth is built as you spend less than you make and to do that you need to know what you are spending.

Tracking your spending can help you identify serious spending issues. You can also see if your spending matched your priorities. It is easier to make changes when you realize that you are not reaching your financial goals because you eat out every night. Tracking your spending allows you to see where your money is really going. It is essential if you want to understand your financial habits and make changes to them.

It is also essential when you are trying to budget. If you do not track your money, then you will not know when to stop spending in a category. it does not need to take very much time each day, but if you consistently track your expenses, you will be able to get out of debt and make the necessary changes to finances. This will allow you to begin to build wealth and go after the things that you want out of life. 

 

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