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.
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.