Copyright© 2006
Do you write checks for everything you buy?
Are you a cash only type of person?
or...
Are you like me and you live and die by your
debit(debt)/check card?
Regardless of the method you use to make your purchases, it
is important to not only know what was spent, but what was
purchased. When you can determine where your money is going
it helps to accomplish a few different tasks at one time.
The first advantage to tracking your spending is that you
can visually see how much you are spending in a particular
category.
What most people don't realize is that by knowing the exact
figure that is spent on a particular category will lead to
a subsconscious effort to control spending in that area.
Secondly, by tracking your spending you can effectively set
up a savings plan that will help you to avoid financial
disasters.
The saying "Plan for the unexpected!" fits very
appropriately here.
If you have savings, you can be ready in the event
something unexpected happens. (i.e. car breaks down, roof
collapses, you take ill, etc.)
Tracking your expenditures will also lead to better money
management. You will know exactly where you stand
financially. This is very helpful in avoiding or reducing
overdraft fees and other associated bank fees.
If your bank requires that you keep a minimum balance in
your checking account, *you* will know when you are
approaching that limit and can manage your money
accordingly.
Lastly, tracking can lead to piece of mind. Meaning, if
done right, you can rest at ease knowing that you have a
strong grasp on your finances.
Even if you are not debt free, by tracking your can create
a plan that will lead you out of debt and eliminate the
stress that goes along with it.
These are just some of the advantages of tracking where
your money goes. Of course, for every one there may be even
additional advantages that we didn't mention here. Most
importantly is just doing it. If nothing else you can save
money, avoid costly fees and be prepared for just about any
financial disaster that may happen.