10 Tips to keep track of your personal expenses

10 Tips to keep track of your personal expenses

Keeping track of personal expenses will keep you debt-free and help you build wealth consistently and intelligently.

Keeping track of personal expenses will keep you out of debt and substantially improve your relationship with money. 

If you want to maintain a balance between what you earn and spend, to optimize your financial status, you must take control of your accounts. 

To do this, you must develop new consumption and savings habits in the short, medium, and long term. 

Learn to control your personal accounts

Exercising control of personal expenses could change your life dramatically; especially if you consider that the money is not worth it. 

Today we will share with you some powerful recommendations from which you can apply in your daily life to improve your financial situation. 

The idea is that you learn to manage your money efficiently. This information will also help you avoid unnecessary expenses, understand how money works, and value the culture of savings. 

These are some of the tricks that could help you improve your finances in a simple, practical, and consistent way:

1. Understand what personal expense control is

 You can’t implement financial changes in your life if you do not know what personal expense control is. 

That is why the starting point is to understand this concept well since it can enhance your financial intelligence. 

In essence, personal expenses are made up of the services you pay for regularly and the goods you purchase. 

That is, they are represented by your expenses (the money outflows that you do not recover over time), and by the purchases you make daily. 

The expenses can be the payment of the rent for your home, basic services, or the purchase of food products. 

So, once you know these two elements, it is easier to start managing your money efficiently, because you know what to expect. 

2. Record your expenses monthly

Something very important is that the control of personal expenses must be carried out periodically.

Therefore, you must be willing to develop habits that help you build wealth, rather than continuing to stick to your old financial ways.

One of the main changes that you should implement as soon as possible is to record your expenses, that is, create a personal budget. The easiest way is to use Excel to categorize the following:

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Fixed costs

Have you ever wondered what a fixed expense is? It is an essential expense in your life. 

The most common are the payment of rent, or services such as light, gas, or electricity, and even those linked to food. 

Variable expands

According to a report from the financial institutions, they are expenses that can change over time, or that you simply cannot know for sure when they will occur. 

Some examples are repairing your vehicle if it breaks down, covering a medical emergency, attending a concert, etc. 

Although in most cases variable expenses are not subject to your survival, you will still have to assume them from time to time. 

When creating your template in Excel you must include a column with your fixed expenses and another with your variable expenses, without leaving aside their respective dates. 

Otherwise, you will not be able to correlate your income and expenses correctly, and therefore, your control of personal expenses will be non-existent.

Make sure you update your template every month so that you avoid financial excesses, and especially so that you are clear about how much money you generated and spent. 

3. Analyze your personal finances

If they asked you right now what your financial situation is, would you know what to answer? Believe it or not, a large percentage of the population is unaware of their economic status. 

This means that you do not know how your income and expenses are related, which indicates your lack of financial planning. 

If you are within this group, you must control your personal expenses as soon as possible.

Start by analyzing how you manage your money, including how you get out of debt, or how you boost your savings (if you do so). 

Then prepare a projection of these expenses and focus on calculating whether your savings are enough to achieve your life goals. 

If they are insufficient, it is imminent that you will have to rethink many things and improve your relationship with money. 

4. Avoid unnecessary loans

Believing that loans are a financial lifeline could get you into serious trouble. Especially if you tend to ask for them lightly, or in situations that do not warrant them. 

For example, if you suffer a personal accident and need to cover high medical expenses, requesting a loan would be understandable. 

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But if you are going to do it to go on vacation to Hawaii, this would be a decision that could cost you dearly. 

Do not forget that you will have to return the money borrowed, along with the interest generated by this operation, and that this rate could exceed your financial capacity. 

Consequently, before applying for loans, you need to verify if you are capable of repaying that debt. If not, consider a less risky option. 

5. Save money right now

People who have excellent control of personal expenses usually have greater financial intelligence. 

Therefore, they are aware of the value of savings and the power it has to build wealth or have economic freedom

You can start by saving 10% of your monthly salary, and then gradually adjust that percentage. 

Additionally, experts recommend getting more out of your money by investing in stocksreal estate, or other securities markets. 

In the latter case, it is highly recommended that you seek the advice of a financial broker so that you do not take unnecessary risks, and do not jeopardize the profitability of your money. 

It is also important to mention that savings cannot be occasional, but 100% consistent. 

This means that each month you must save a percentage of the money you generate so that you notice positive changes in your accounts. 

6. Use your credit cards wisely

Credit cards can be a double-edged sword for those who do not understand how they work. In theory, they are extensions of credit that entail the payment of monthly interest.

You must understand that you cannot use them freely, or indiscriminately because the money you spend does not belong to you. 

On the other hand, if you learn to use these plastics wisely, you could make them work in favor of your credit record, which could generate great financial benefits. 

Avoid using them to cover unnecessary expenses, or those that are completely dispensable, such as purchasing coffee at the store, or paying for monthly subscriptions. 

7. Catch up on your debts

Maintaining good control of personal expenses also means avoiding debt, or getting out of it, if you have already incurred it. 

If you have different types of debts, it is best to establish an intelligent plan that allows you to pay them off, without incurring further financial hardship. 

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Experts recommend paying off those with the highest interest rates first and then paying off those that are less worrying. 

Living in debt will not only affect your finances, but your entire lifestyle, since these pending commitments usually generate stress, anxiety, and frustration. 

8. Be clear about your financial limits

The only thing you need to incur financial excesses is to ignore your financial limits. 

How can you keep track of personal expenses correctly if you don’t know what your income level or assets are?

The wisest thing is to adjust your expenses and savings to the amount of money you generate monthly. 

If you consider that your income is modest, it would be ideal for you to avoid unnecessary expenses, luxurious purchases, and excesses. 

Prepare a monthly budget and respect it, if you want to live debt-free while saving and maintaining an optimal balance with your accounts. 

9. Don’t buy impulsively

The festive or discount seasons can be your worst enemies since they have the power to unbalance your consumption habits. 

If you don’t keep track of your personal expenses, it will be easier to make wrong decisions with your money, such as making impulsive purchases that you might regret. 

These can pulverize your personal budget, harm your savings, and even encourage you to apply for loans. 

It’s not worth making unnecessary purchases just because you feel like you have to take advantage of a promotional price, or an offer. 

The clearer you are about your financial goals, the harder it will be to ignore your budget or waste your money. 

10. Use financial applications

In case you don’t know, there are mobile applications capable of improving your relationship with money substantially. This is because they allow you to record your income and expenses, set spending limits, set payment reminders, etc., in a simple and friendly way. 

All you have to do is download them to your smartphone, and make a couple of basic configurations so that they start working based on your financial well-being. 

They can make your life easier and help you achieve your monthly money goals, which is very useful and necessary in these times. 

Keep track of personal expenses

Controlling personal expenses makes the difference between building wealth or slowly becoming poorer. 

Therefore, you should give it the importance it deserves, while taking responsibility for the optimal management of your money.

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