How to keep Track of your Finances

Keeping track of your finances might seem difficult at first, but staying on top of your cash flows can not only help you to pinpoint errors long before they start to get expensive, but it can also help you to achieve your goals and become better at planning for the future. Take a look at the tips outlined below for how to get started.  

Create a Budget

The first step to keeping track of your finances is to create a budget. You need to have a proper record of the money that comes in as well as what goes out for you to be able to balance your personal accounts. Your budget is simply a statement or plan of how you will spread your resources around, so you have the power to allocate funds towards different causes but this is easier if you know exactly how much money you have to spend and save. Listing your income, expenses and savings helps to paint a picture of your finances so you can be realistic about your goals and use your money in the most profitable way. For instance, it may be better to pay off a loan than to aim for increasing savings if the interest rate is astronomically high. This is one of the benefits of budgeting and keeping track of your finances.

Set Up a System and a Routine

For you to be effective at tracking your money you need to have a system and a routine. This means you must figure out what is the most appropriate way to track your finances and then make this a habit by doing it at a specific time every week or month.

Pick Your Method (online, mobile banking, budgeting software, excel spreadsheets,

There are a number of methods you could choose to track your finances. Online banking is a popular way to stay in the know and most banks and financial institutions now offer this option. You can log in to your accounts to view balances, transfer funds and even pay bills. This makes tracking your money fast and easy. Mobile banking uses newer technology but this has also spread quickly especially since smart phones have now become extremely accessible. Mobile banking allows you to see your accounts from anywhere at any time. You may prefer to sit at home and use a more traditional method such as an Excel spreadsheet to do your budgeting or maybe you have become comfortable with a particular software. Pocketsmith is a terrific example of a financial software that provides you with powerful tools to track your finances.

Whatever method you choose remember that for it to be successful you must first go back to basics and itemize your income and expenses and then make the act of tracking your finances a part of your routine.