It’s very easy to lose track of where your money if you’re not monitoring your spending.
Alexandria Blaelock, author of Holistic Personal Finance: How to pay for the life you want argues “If you want to control your spending, you need to know where your money is going, and what it’s doing when it gets there. The best way to do that is to track it as it comes in and as it goes out.”
Here are Blaelock’s tips for monitoring your spending:
- As you note each expense, assess its validity: This happens more or less automatically; you might think a cost was too high and you’ll wait for it to come on sale next time.
- Assess the reasonableness of seasonal variation: As the months go by, you can see your costs fluctuate and decide whether the costs over the year are reasonable, or you should consider making changes to the timing of your spending.
- Compare each item against the category total: Does it seem too much, or is it about the right proportion of the total? For example, are you eating too much take-out or delivery meals and not enough on fresh vegetables?
- Note weird money leaks: Is your money disappearing to unexpected places? Do you need to take action to prevent that?
- Does your spending support your values: Are you getting closer to your goals or further away? Is your fashion magazine a legitimate research cost for your summer wardrobe, or did you forget to bring a book?
Alexandria’s tips on monitoring your spending will help you control your spending and achieve your goals.
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