Author: Ashley Eneriz / Source: Wise Bread
How often do you find yourself in the red at the end of each month, wondering where all your money went? If you’re like many Americans, living paycheck to paycheck with too much debt and too little savings is your normal. But it doesn’t have to be. There is a solution that can pull you out of your mindless spending habits, and it’s a simple one; tracking your money.
What is tracking?
Tracking your finances is the act of writing down or digitally logging everything you spend for the month. This includes every expense, big and small, from your mortgage payment to that $2 soda you bought on a whim.
The goal is to find out how much you are spending compared to how much income you are bringing home. If you spend more than your monthly paychecks, you are probably relying on credit cards to fill the gap, which is driving you further into debt. If you are spending exactly what you make, you are not leaving yourself enough room in your budget to build an emergency fund, save for retirement, or pay down debt.
Think of tracking as a checkup for your finances. You need to see what your current financial state is so that you can improve it.
Why you should track your spending
If you constantly feel that you don’t have enough cash each month, tracking solves the mystery of where your money is going. It’ll show you the areas of your life where you are overspending or spending foolishly. Knowing where your money is going will allow you to address poor spending habits and get serious about…
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