Track Expenses, Why and How to Do It

Some of us may have felt that the money we have earned is running out quickly without knowing where it is going. Has anyone ever experienced the same thing?

That's why keeping track of expenses is essential in managing your finances. You can better understand your monthly money flow by tracking your expenses. So, why do you have to do it?

Why Keep Track of Expenses?

Keeping track of expenses is an essential step in managing your finances. By tracking expenses, you can:

a. Knowing where your money is going

By clearly knowing where your money flows each month, you can identify areas where you can save.

b. Creating a Financial Plan

You can create a more realistic and planned financial plan with accurate data on your spending.

c. Avoiding Debt

By managing your expenses well, you can avoid unnecessary Debt.

d. Recognize Spending Habits

Keeping track of expenses also helps you become aware of spending habits you may not have before.

Those are some strong reasons why we need to keep track of our expenses, especially those related to Debt, right? If we already know why it is essential to track our expenses, surely some will ask, what are the next steps?

How to Track Expenses?

To track expenses, you can do some steps such as:

a. Use Financial Logging App

Applications such as FINETIKS, available in Google Play and App Store, can help you record every transaction easily and quickly.

b. Record Every Expense

Keep track of all your expenses, both big and small. Recording every expense will help you clearly understand your spending habits.

c. Create Expense Categories

To make it easier to manage, create categories of expenses such as food, transportation, and entertainment.

d. Compare with Revenue

Compare your total expenses with your monthly income to determine how efficiently you manage your finances.

e. Set Spending Limits

Set spending limits for each category to make it easier to control your spending.

Tips to Track Expenses to Manage Finances More Effectively

a. Conduct a routine review

Review your spending regularly, at least once a month, to determine trends.

b. Identification of Non-Important Expenses

Identify non-essential expenses and look for ways to reduce them.

c. Create a plan to set aside funds

Plan to put a portion of your income into savings or investments.

Keeping track of expenses is a simple task, but it requires patience and consistency. Doing so, you can better manage your finances, avoid future financial problems, and achieve your financial goals.