Knowing how much you spend is quite important in to an overall financial strategy. This article will discuss the importance of spending awareness, ways to improve it and benefits associated with it. According to the Society for Financial Awareness (SOFA), knowing financial solutions and being ready for financial adversity is an essential element to living well. Moreover, If you don't know how much you're spending you might as well be subscribing to bank overdraft charges, bounced checks, and personal budget deficits.
Knowing how much is spent on what is a big part of a personal budget because budgets are essentially a price limit on various pre-planned purchases. It is essential to keep track of each purchase to stay on budget. Without a budget, personal finances can get out of control and potentially cause damage to a credit score and financial history. Some employers even access credit information to determine how organized and disciplined candidates are. What's more an out of control and disorganized budget can cause family problems and stress.
Spending and financial awareness tips
Even though it is important to know how much is spent on what it can get confusing and tedious with all the receipts, the cents, multiple sources of payment etc. With a little fine tuning, lots of people who don't like managing their money can learn to keep track of money with relative ease. Here are a few tips to help keep track of what you're spending.
Spread sheets
Use a spreadsheet such a Microsoft Excel and create a computer checkbook. At the end of everyday let the first thing you do at the computer be entering your purchases. Excel has a handy function called SUM that does the adding for you. All you have to do once it is set up is enter the numbers. To use it type in the expense for the day in a column one after the other. In the first blank space at the bottom of the column press the insert function feature. Look for the SUM feature and enter SUM=H4:M4 if you have 6 purchases in rows H through M in the 4 column. It may sound confusing at first but with a little practice you can design the spreadsheet to add for you.
Debit cards
Only use a Visa or MasterCard Debit card to make purchases. This way you'll always have a record of what you spent even if you lose the receipts. Additionally, debit card information is harder to steal than credit card information.
Online banking
If you don't utilize online banking services already, it's very helpful. With online banking you don't even have to create a spreadsheet as there is one already made for you. Sometimes you can even pay your bills with this feature saving yourself trips to the post office and stamps. Online banking often provides the purchase spreadsheet record for you with a 1-2 day processing delay.
Account holdings
Keep only as much money as your budget allows for in your checking account and transfer the rest into your savings account or money market account. This way you'll be less tempted to access those funds and after a couple of painful overcharge fees discipline may begin to set in. If you don't want the overcharge fees for going over the budget don't spend more than you afford. Self discipline is unfortunately required to get on track financially.
Mental record keeping
Mentally keeping track of your budget and what you have available can also help you become aware of how much you spend. It also develops financial discipline and awareness if you do this, and overtime this may positively influence your financial habits.
Summary
Knowing how much is spent on what is a big part of a personal budget because budgets are essentially a price limit on various pre-planned purchases. It is essential to keep track of each purchase to stay on budget. Without a budget, personal finances can get out of control and potentially cause damage to a credit score and financial history. Some employers even access credit information to determine how organized and disciplined candidates are. What's more an out of control and disorganized budget can cause family problems and stress.
Spending and financial awareness tips
Even though it is important to know how much is spent on what it can get confusing and tedious with all the receipts, the cents, multiple sources of payment etc. With a little fine tuning, lots of people who don't like managing their money can learn to keep track of money with relative ease. Here are a few tips to help keep track of what you're spending.
Spread sheets
Use a spreadsheet such a Microsoft Excel and create a computer checkbook. At the end of everyday let the first thing you do at the computer be entering your purchases. Excel has a handy function called SUM that does the adding for you. All you have to do once it is set up is enter the numbers. To use it type in the expense for the day in a column one after the other. In the first blank space at the bottom of the column press the insert function feature. Look for the SUM feature and enter SUM=H4:M4 if you have 6 purchases in rows H through M in the 4 column. It may sound confusing at first but with a little practice you can design the spreadsheet to add for you.
Debit cards
Only use a Visa or MasterCard Debit card to make purchases. This way you'll always have a record of what you spent even if you lose the receipts. Additionally, debit card information is harder to steal than credit card information.
Online banking
If you don't utilize online banking services already, it's very helpful. With online banking you don't even have to create a spreadsheet as there is one already made for you. Sometimes you can even pay your bills with this feature saving yourself trips to the post office and stamps. Online banking often provides the purchase spreadsheet record for you with a 1-2 day processing delay.
Account holdings
Keep only as much money as your budget allows for in your checking account and transfer the rest into your savings account or money market account. This way you'll be less tempted to access those funds and after a couple of painful overcharge fees discipline may begin to set in. If you don't want the overcharge fees for going over the budget don't spend more than you afford. Self discipline is unfortunately required to get on track financially.
Mental record keeping
Mentally keeping track of your budget and what you have available can also help you become aware of how much you spend. It also develops financial discipline and awareness if you do this, and overtime this may positively influence your financial habits.
Summary
After time, and with diligence and practice these things become second nature. The reason the Excel method works so well is that if you stick to it you will becoming an experienced budget practitioner after a few weeks or less. It feels good to know what you've spent and what you have available at the drop of a hat. After becoming a skilled budget practitioner, stress levels can go down, spending becomes disciplined and life generally becomes a little more easy.
Chances are you owe it to yourself to keep track of what you spend and the tips in this article may assist with that process. For additional ideas on why it is important to know how much you are spending, consider reviewing financial websites, consulting with family and friends, bankers etc. There are many ways to improve financial awareness for a more complete financial health profile.
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