How tracking your spending can keep you on budget

Woman creating a budget

Tracking what you spend (either using an app, spreadsheet, or in a notebook) is an important step to take to ensure your budget goals are being met. This is important because it shows you how much you have spent and what you’ve spent it on, allowing you to know when you have overspent and can help you identify where you need to make changes to your budget.

You will need to make time regularly to record your expenses. Saving your receipts from every transaction and keeping them handy can make logging your expenses easier. As you record your expenses in each category, you will need to keep a running total of how much money you have left in the different areas of your budget.

If you notice that you are out of money in one of your categories, you will have to stop spending money on things that fall under that area. Budgeting is a trial and error process and you may find that your budget is unrealistic, so make changes accordingly. You can adjust your spending categories for next month’s budget, or you may just need to cut back in some areas. For instance, if you’re going over-budget in your entertainment section, cut back on dining out and make more meals at home. However, if you have some money left over, you can roll it into your next month’s budget or put it in your savings account!

Whatever your spending or saving goals are, tracking is important in order to help you stick to your budget and will give you the knowledge you need to make changes to your spending habits when necessary.