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5 Reasons to Track Your Spending

5 Reasons to Track Your Spending

Maintaining a monthly budget isn’t just good for your finances—it’s good for your health, too.

Between work, household chores and our kids’ schedules, not many of us have the time it takes to develop a detailed budget. In fact, according to one report, only one in three Americans routinely track their monthly incomes and expenditures.

Creating (and sticking to) a monthly budget that tracks your income versus your expenses can have some serious benefits—and not just for your wallet. More and more research is linking financial concerns to health concerns, unhealthy behaviors and skipping out on medical treatments. But the good news is that it really is possible to develop a totally manageable, sustainable monthly budget and actually stick to it.

5 reasons to track your spending
Before we get to the how, let’s discuss why you should be tracking your spending:

  1. It’ll help you identify spending patterns.
    Many of us spend mindlessly. Grabbing a daily coffee from the café, for example, can seriously add up over the course of a month or even years. Tracking every single expense allows you to learn more about your spending and saving habits—both good and bad—so you can assess and reset. Once you get a better look at your spending patterns (and how much cash you’re really spending on non-necessities) you might want to skip the daily $3.50 coffee and deposit that whopping $1,320 per year into a savings account.
  2. It’ll help you achieve your short- and long-term financial goals.
    Are you saving for a designer bag? Or your first house? Creating (and sticking to) a monthly budget can help you achieve those short- and long-term financial goals. How? Looking at your income versus your expenses can not only help you identify bad spending habits, but it can help you discover new savings opportunities, too. Here’s one easy way to save more cash: Build a savings goal into your budget and set up automatic transfers into your savings account, so saving just feels like a regular monthly expense.
  3. It’ll help you spot fraudulent charges.
    It seems like there’s a new credit card breach every day, right? Keeping a close eye on your daily expenditures can help you identify unauthorized charges from your credit cards, checking account or savings account immediately—and help you avoid potential complications down the road, like identity theft.
  4. It’ll thwart unnecessary spending.
    If you’ve spent too much in a particular category in your budget (like restaurants or entertainment), your budget will be in the red—which can help prevent any more unnecessary spending.
  5. It’ll make you healthier.
    According to a survey by the American Psychological Association, 72 percent of Americans felt stressed about their finances during the month prior. Uncontrolled, chronic stress can impact your health and wellness in countless ways—from depression, to gastrointestinal distress, to increased blood pressure and even heart attack stroke, to name a few.

    What’s more? Financial stress has a significant impact on relationships—31 percent of Americans report it as a major source of conflict—which, in turn, can increase risk of anxiety, depression and high blood pressure.

    The bottom line? Maintaining a monthly budget won’t just keep your wallet happy—it’ll help keep your brain, heart, lungs, digestive tract and emotions healthy, too.

How to start tracking your spending
Whether you want to track every single expense in a notebook, spreadsheet or a mobile app, there are tons of ways to manage (and monitor) your finances. The important thing is to choose the right tracking method for your schedule and lifestyle. If budgeting becomes a hassle, you probably won’t do it.

Once you’ve chosen a method, identify the spending categories you’ll have each month—and don’t forget to include a budget for savings! If your finances are combined with your partner’s, be sure to discuss exactly how much is reasonable to spend in each category throughout the month, so there are no surprises from either of you. Then, start tracking (and saving).

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