It sounds simple right – track your money so you know where it’s going and so you can see how well you are sticking to your budget. Yet despite how simple it may sound, so many people still don’t track their spending at all.
My wife and I have been tracking our spending for quite a while now, and it has really helped us to save money. You might think – how does tracking money help you save money? And the simple truth is that it helps you save by giving you insight into exactly where all your expenses are. You would probably be surprised just how much money leaks out of your budget each month, money that can just disappear into thin air.
Once you start tacking your expenses though, all of a sudden you can start to get a clear picture of exactly what is going on and where your money is actually going. The surprising thing for my wife and I was just how much money we were wasting every single week on small food items. Individually none of them were really worth worrying about, but when you combine them over a week or a month, all of a sudden we were talking about close to 10% of our total spending.
The main point I am trying to make is that unless you start tracking every single little expense, and then reviewing it monthly. You will never truly realise just how much money is leaking out of our wallet and how much money you could be saving.
I remember adding up all the coffee purchases that my boss used to make everyday he was at work. He was buying around 3 cups a day, at a cost of around $2.50 a cup. That meant that over the course of a week he was spending $37.50 a week and $162.50 a month. That’s massive and it is just one small example of something that doesn’t cost much, but that can make a big difference to your overall budget.
The thing is that he never realised just how much he was spending until someone pointed it out to him. The benefit of tracking your own spending is that you don’t need to wait for someone to point it out to you, you can identify spending habits yourself and all you have to do is track and review.