![]() For example, you may realize 15% of all your net income is being used on dining out. Once you have some data recorded, such as 60-90 days of expenses, you can begin identifying trends in your spending patterns. You may not be able to eliminate an expense entirely, such as your internet expense, but you may be able to shop around or have the rate reduced. The primary purpose of tracking your expenses is to identify any bloat in your spending. There are some recurring bills that are essential and others that are non-essential but greatly appreciated. Non-essential expenses can also be referred to as discretionary spending. Although you can’t avoid these expenses, there are ways you can reduce the overall expenses. Essential ExpensesĮssential expenses are the expenses you can’t live without. This number typically doesn’t change month over month, but it’s still helpful to record how much money you’re spending on your monthly rent or mortgage payment. Here are some common categories: Rent / Mortgage There are a variety of categories an expense can be bucketed into in your expense tracker. Categorizing your expenses is vitally important. The expense tracker should not only record how much money you spent on a given transaction, it should also record what you spent your money on. However, you’ll have more control of your data, and can become hyperfocused on your categories – which we’ll touch on in greater detail below. No matter what you use for expense tracking, one thing is for certain. Tracking your expenses in a spreadsheet is another common approach to expense tracking, although creating a personal expense tracker in a spreadsheet software (such as Excel or Google Sheets) is a bit more time consuming as it will require you to manually enter the expense and category. There are also apps that you can link your financial information to that will track your expenses every time you swipe your card. Today, some banks have an expense tracker tied directly to your credit or debit card. ![]() What Is an Expense TrackerĪn expense tracker comes in various forms. Getting a better understanding of your personal finances can be extremely helpful, and an expense tracker is a great way to get fully acclimated with your spending and savings habits. ![]() If you were to track your expenses over a specific period of time, such as 90 days, you may be surprised with what you’re spending your money on. The main purpose of an expense tracker, also known as a finance tracker, is to identify where you are spending your money, and from there, you can identify ways or opportunities to save or invest more of your money and reduce your cost of living. An expense tracker is an incredibly useful and practical financial tool. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |