Tracking your monthly expenses is the easiest way to help you save and will encourage you to be more efficient with your finances. It can also help with your big picture goals like paying off debt and reaching your financial targets -- however aspirational they may be. The everyday costs of living can’t be avoided, but with a little strategy and financial tab-keeping, you can be a savvy money manager.
To see where your money is going. Do you really know how much you spend every month? Think about it: mortgage or rent, groceries, utilities, child care, entertainment, subscription services, etc. Obviously, they all add up. When you make a payment for anything, do you know how much you have left for other things? You might be wasting money somewhere. Do you order take out more than you should? Is there a recurring subscription service that you aren’t using? Keeping track of your expenses may show you some of the ways you can save by cutting back on your spending.
To prevent fraud. Cases of ID theft and fraud are more common than ever. When you track your expenses, you’ll be able to identify unauthorized charges on your credit or debit card accounts.
To save. Saving for retirement, an emergency fund, vacations, a down payment on a house, or college expenses is easier when you know how much extra you’ll have every month. When you track your expenses, you can allocate your extra funds for a savings need.
How to track expenses
Monitor your accounts
Keeping tabs on your checking and credit card accounts online, either weekly or monthly, is always a good idea. Not only can you track your spending, you’ll be able to identify fraudulent charges or automated account withdrawals you may want to cancel -- a subscription service, gym membership, etc. You can easily monitor your Atlantic Union Bank accounts through Online Banking or our Mobile App.
Write them down! Enter all your expenses into a spreadsheet. This includes all your debits and credit card payments from your account monitoring, in addition to whatever else you’ve spent on from your daily routines. Most, if not all, of your daily spending (example: coffee, lunch, hair appointment, etc.) should be reflected in your account monitoring via debit card purchases, credit card charges, or ATM withdrawals. Just to be thorough, use a notepad or the notes feature on your smartphone to tally your spending specifics when out and about. If you are a spreadsheet expert, you can design and generate custom monthly or weekly reports.
Group your expenses. You’ll always have the ongoing regular expenses like utilities, mortgage or rent, car payments, etc. that will hardly change. Keep those separate from other expenses like entertainment or dining out/ordering in, travel, clothing needs, impulse buys, etc. Seeing them altogether may give you a better idea on what spending can be reduced or eliminated.
Result: better money management
Tracking expenses can encourage you to live within your means and make spending adjustments. These adjustments will go a long way in helping you save, reduce debt, and paint a clearer picture of how you can set and reach your financial goals.