There are numerous reasons why it’s important to know how much you are spending. If you don’t know how much you are spending, you can conceivably not know how much is left in your bank account, how much available credit is left on your credit card or how you are going to be able to meet the repayments required when the bills pop through your door.
The financial tools available to all of us in present times mean that it is entirely possible if not in fact extremely easy to lose track of how much you are spending. Credit cards, debit cards and a whole host of other electronic means of payment mean that we do not necessarily need to hand over notes or coins in order to pay for a product or a service. The convenience factor of these payment methods is of course what brought them in to being but the dangers of them have come to outweigh the convenience for a great many people and by a long way.
Virtually wherever we go these days, it is possible to pay by methods other than cash. Where in past times we would know how much cash we had available on our person and be able to monitor and control our spending by the rate at which it diminished, such control is often now beyond our capabilities. Handing over such as a credit card will of course involve us knowing how much we are spending on any particular transaction but it is all too easy to lose track of same in the bigger picture.
When you lose control of your spending and thus the knowledge of how much you are in fact spending, you are inviting a nasty surprise upon yourself for the next occasion upon which you visit your bank, sign on to your bank account online or receive your credit card statement through the post. All too often, people get caught up in how much fun they are having, perhaps particularly if on vacation or holiday, and lose track of how much the fun is costing them, only to have such a nasty surprise awaiting them just around the corner.
Overspending in such a fashion can in the first instance lead to you not having enough money left over to pay the necessary bills which have to be paid prior to your next wage or salary payment. This can lead to paying said bills on credit cards, which themselves already have balances outstanding. This scenario can very quickly snowball in to a mountain of debt if left unchecked and lead to problems with same in the long – not just the short – term.
It’s important to know how much you’re spending, therefore, in order that you may keep a track of same, ensure that you do not spend beyond your safe limit and do not create for yourself problems with debt that could have consequences reaching far in to the future.