Ever look at your bank statement and wonder where all your money has gone? Now that you can spend hundreds of dollars on your credit card with just a simple tap, it can be easy to lose track of your expenses. To ensure accountability, there are small steps you can take to gain an accurate assessment of your spending. Not only does this help you control your finances, but it also gives you the opportunity to prioritize your spending. To optimize your financial health, here are 5 tips on how to keep track of household expenses:
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5 Tips on How To Keep Track of Household Expenses
1. Regularly Check Your Account Statements
The longer you go without checking your bank statements, the harder it is to gain control over your expenses. By regularly analyzing your accounts, including checking and credit card accounts, you can accurately identify your spending. This also helps you spot any irregularities in your spending for increased security of your money. If you’re a little overzealous with your spending one week, you can pull back the next to get yourself back on track. But it’s crucial you know when and where you’re spending to maximize your financial health.
2. Categorize Your Expenses
To keep track of your accounting, you can group your expenses. While it may not be fun to realize just how much you’re spending at Starbucks, categorization lets you know what you’re putting your money towards. If you’re wanting to cut back on expenses, this can identify high-cost areas. Perhaps you’re paying for a recurring subscription you don’t use or can cut back on the regularity of your UberEats orders. Clarity is key when it comes to financial planning.
Once you start evaluating your purchases, you’ll be able to identify fixed expenses and variable expenses. Fixed expenses tend to be consistent month-to-month and have little to no flexibility. These include payments such as your rent or mortgage, utility bills, loans, etc. Whereas your variable expenses, including food, clothes, recreational expenses, travel, etc. have more wiggle room.
3. Use a Budgeting App or Expense Tracker
Use technology to your advantage and try out some different budgeting apps. If you’re always on the go and don’t have the time to sit down and analyze your daily expenses, you may benefit from a budgeting app. There’s a variety of apps on the market, from free to paid, you can explore which ones work best for you.
In Canada, some of the best free budgeting apps are:
If you’re looking to invest, these paid apps come loaded with extras:
If apps aren’t your thing but Excel is, spreadsheets are a great tool to track your money. There are several budget templates available online such as Microsoft Office, Google Drive, Mint, and more. Try out different ones to find out which expense tracker is right for you.
For the clearest assessment of your spending, especially if you’re wanting to know how to track business expenses and income, our professional accountants can provide thorough and efficient bookkeeping for you and your business.
4. Stick to Your Spending Limits
If you’ve been tracking and using budgeting tools to gain control over your spending, it’s important to set spending limits you can live with. Unrealistic budgets can do more harm than good, causing stress, guilt, and more spending as a result. If possible, make minor and gradual adjustments so that it’s more likely you’ll stick to your spending limits. After each month, you can evaluate which areas of spending have more room to cut and if any need a bit more flexibility.
5. Pinpoint What You’re Saving For
Having a clear idea of what you’re saving for makes budgeting easier and more rewarding. Are you putting money into investments? Perhaps you’re saving for a house or vacation. While paying off debt and adding to your retirement fund should take precedence over a trip to Mexico, budgeting allows you to diversify your savings. Your dream vacation may take a little longer to save for but at least you’ll be able to enjoy it fully knowing your expenses are in order at home.
Budget with a Professional Accountant
Take control of your expenses today and work with a team who prioritizes your financial health. At Genesa CPA, our Vancouver accounting firm can evaluate your finances to help you reach your full potential. We offer the highest level of accounting services in Vancouver B.C. to develop your assets, empower your dreams, and grant you financial freedom. Reach out for a consultation today!