Tracking your expenses come with many benefits. It’s a simple way of evaluating your spending habits and how you handle your hard-earned money. By knowing exactly where your money goes, you are creating a “mirror” that will show how bad or good you in terms of budgeting and saving your money.
The benefits of tracking you expenses
When you track your expenses, you’ll be surprise that those small purchased each day like coffee or softdrinks really ate huge part of your income if added together. You will also identify if you are spending your money on things that matter.
On the other hand, if you’re not tracking your expenses, it’s easy to forget those small expenses left and right that eating huge amount in your budget over the long run. By tracking your expenses, you will see them. And hopefully by knowing them you will take action!
What’s the point of tracking your expenses if you’re doing the same things over and over again?
The main reason why you need to track your expenses is to know where you spend most. By knowing them you can formulate a strategy or make an action plan how to cut those expenses and eliminate those unnecessary ones. This will give room for additional money that you can use for other important areas in your life.
Before we start our emergency fund goal, me and my wife started tracking our expenses and listed everything down. Down from every single peso! Yes you heard it right! After a month or two, we gathered the data and made some simple reports.
Based from that data, we identified how much we spend every month, we added some buffer and that helped us identify our emergency fund goal target. We worked on that for almost a year and now we’re done with our emergency fund. Woo hoo! You can read it here.
You can also use it to invest in yourself like attending seminars and training about personal finance. You can buy a book. Or you can save them for your future use. Whatever goals you may have, tracking your expenses will definitely give you more benefits along the way.
You can also check my previous article that shares 5 simple ways to track your expenses here.
Start now and do it consistently. You’ll realize that it’s one of the best thing you can do to manage your personal finance. By knowing and tracking your expenses, you will have the FACTS on where your hard-earned money goes.
Not only that, this will also help you discipline and prevent yourself from unnecessary spending in the future that can hold you back in achieving your financial goals.
To our success, cheers!