How to Track Your Budget

ToFinancial goals of the family: It takes two to tango

As soon you start spending your money, it’s time to start tracking your spending so that you can create and follow a personal budget. Keeping track of your expenses, while sometimes tedious, is the best way to find out exactly where your money is going.
The simplest way to keep a track of your finances, especially your cash, is the low-tech way, with a notebook and a pen. By carrying around a notebook with you, you can track exactly where every dollar is going- from a small coffee on your way to work to a spending splurge at a mall. If you’d prefer, on a daily or a weekly basis, you can transfer your handwritten notes to a computer spreadsheet.
Once you have collected information for about a month, you will have a good baseline of information to use to create your personal budget. Some major categories that you will want to include are housing, utilities, insurance, food, clothing, or other personal finance program, add up the expenses that you have been tracking, and then calculate what you would like to budget for each category. Keep in mind that you would need to budget for some things which might be necessary but won’t occur every month. You can either create a budget for each individual month for irregular expenses or a standard monthly budget.
Your budget should also include some personal savings amounts for retirement savings, college savings, an emergency fund, long-term savings, and any other saving goals you may have. Don’t wait until the end of month to see what’s left budget for your savings first.
Creating a personal budget is a good first step, but the most important thing is to follow the budget. Make time weekly, or monthly to track your spending and start to see if you are actually keeping to your budget. Using a personal finance program or an online service is probably the easiest way to do this on an ongoing basis, but make sure you continue to track where your cash is going. You may be surprised to find out how the frequent small amounts you spend actually add up to big money.
After tracking your personal budget, you may notice some areas where you will have to make changes. Don’t just increase your budget without considering alternatives. While you may have no choice, if prices and expenses go up, shop for better deals before giving in to the extra expenses.

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