Tracking expenses this way can help you save thousands of dollars annually, stress-free.
You’ve probably read a lot of tips and tricks about tracking expenses, but they all seem to be daunting and time-consuming. Indeed there’s a lot of effort that goes into keeping receipts, listing expenses down on a piece of paper, and adding all expenses to see how much money you have left. This is why a lot of people fail to keep up with their budget and eventually remain in the paycheck to paycheck cycle.
But tracking expenses doesn’t have to be this way. What if there’s an easier way to track your expenses?
Before we get into this, it’s important for us to understand the idea behind tracking expenses.
In the previous weeks, we’ve talked about the importance of creating goals and proper budgeting. We know that with proper budgeting, we can still enjoy our hard-earned money. Now, the magic of putting that budget into action happens in tracking our expenses.
It’s important we track our expenses so we know where our money is going.
Imagine bushwalking or trekking in an unfamiliar place. We know where our destination is, but getting there can be confusing. Even if we have a map, getting lost is inevitable. When we get lost, the obvious solution is to retrace our steps. That way, we know where we’ve taken the wrong turn.
That’s the same when it comes to reaching our financial goals.
Our financial goal is our destination, and our budget plan is our map. By tracking expenses, we can retrace our steps to see where we’ve taken a wrong turn. If we don’t track our expenses, we lose sight of the plan we’ve created to reach our financial goal.
Here are three benefits of tracking expenses:
Becoming aware of your spending habits
By tracking expenses, we can develop the consciousness to avoid expenses we don’t need. We can see how much of our hard-earned money goes to things we can live without or change.
As human beings, we act out of habit. We wake up at a particular time, get hungry at a specific hour, or watch a show to relax before bed. Some of our expenses become habitual too. For some, buying something new every month is a must. For others, it’s getting a second cup of coffee to get through the day. Or perhaps we constantly fall for the marketing traps retailers have set, causing us to overspend.
Sticking to the budget and decreasing your stress
If we lose sight of our financial destination, we end up spending more on entertainment and eating out. This is like getting lost with our map missing, causing us stress. It’s that same feeling we get when we find out we can’t afford dinner the next day after partying hard the night before.
By tracking expenses on a daily or weekly manner, we know how much we have left in our account. This will help us manage the expenses we have left within the month. By knowing we’re still within our budget, we can avoid stress.
Seeing unusual and unexpected charges
Tracking our expenses can also help us find unusual or unexpected charges made in our bank account.
In this day and age when almost everything has gone digital, we become susceptible to having additional charges in our bank accounts without our knowledge. Apps or streaming services we’ve cancelled a month ago might still be charging us subscription fees. We might have been charged double after tapping and going. The bank might even be charging a monthly fee now without our knowledge. These charges may not be a lot, but they do add up to a significant amount.
When we track our expenses, we become aware of these unusual and unexpected charges, so we can address them immediately.
Here’s how Frollo can help track expenses:
With Frollo, we can immediately see the transactions we’ve made. A key feature Frollo has is the automatic categorisation of transactions, so we can see how much of our budget has been spent on living expenses, lifestyle expenses, and savings. Frollo also alerts us of recurring bills, so it’s easy to see if we’re still getting charged for a subscription we’ve cancelled before.
Tracking expenses can be a daunting and time-consuming process, but becoming aware of our spending habits will help us avoid getting lost in this financial jungle. As long as we’ve got the right tools, like Frollo, to help us trace where our hard-earned money is going, we can achieve the financially stress-free life we’ve been aspiring.
So now, go forth and explore the world. And remember to track your steps to see where you’ve made a wrong turn. (and download our free money management app to get started)