Today’s post is from finance writer Debbie Dragon.
Just because you are happily on your own and seem to always have enough cash for the things you need does not mean you have to forego the all-important steps for managing money. You may not have anyone else to answer to concerning your finances as a single woman, but when it comes down to it, you can be causing great harm to your own future financial stability.
Expense tracking is a vital part of financial management. Being a single person, it can be easier to miss that step since no one else is watching. But if you plan on being financially set for retirement and all the other things that happen between now and then, tracking your money habits is crucial. Until you create an actual visual of what you are really spending, you may never fully realize how much you are missing out on when it comes to being money savvy.
Why Money Tracking Matters
Tracking your spending is a very important part of budgeting. Few people realize just how much cash they give out in the course of a month and when they finally get serious about keeping track of their spending, they are shocked at what they find. A few dollars here and there for coffee, or water, or charitable donations may not seem like a lot at the time but when it is all added up, your couple of bucks can turn into a couple hundred bucks in a month’s time. It may not hurt you now but in the long run you may find that the money would have been better invested into a savings account or investment.
Tips for Tracking Your Cash
The easiest way for you to keep up with your expense tracking is to start an expense tracking sheet. Rather than writing your expenses down on multiple sheets of paper scraps or used napkins, keeping your log on an actual spreadsheet can make it easier to organize and categorize your spending habits. You can easily fold up the spreadsheet and carry it in your checkbook so it is always accessible until you sit down at the computer again to enter each of your transactions.
Get in the habit of asking for and saving the receipts on all of your purchases. This can help you at tax time if you find that some of your spending is actually deductible. Staple the relevant receipts to your expense tracking sheet so you’ll have them on hand when and if you need them for income tax time. Receipts can also serve as a reminder of how much you spent and where when you can’t update your spreadsheet right away.
Write it All Down
Don’t take time to think about the details when you spend money. Just write it all down on your spreadsheet and categorize it later when you can concentrate. The reason many people fail to stick with expense tracking is because they make the process too complicated and it becomes overwhelming.
Be Honest With Yourself
You may not want to remember later that you spent $200 on a pair of shoes but in order for you to gain an accurate picture of what your spending habits are like, you need to write down everything you spend and where you spent it. At some point, purchases that may later bring regrets can be avoided all together as you become more familiar with your finances and improve how you manage your money.