One of the key drivers of financial success is to avoid overspending. Living within your means to avoid the never-ending and expensive debt trap is one of the best ways to financial success. Fortunately, there are several tools that keep track of your expenses automatically. They will, if used correctly, help you achieve many of your financial goals and attain a certain amount of financial freedom.
There are tons to choose from and most are reasonably easy to use. If you get into the habit of using them, you will soon find it easier to manage your money and monthly spending. The best part is, many of them are free apps that you download to your phone.
Older manual methods used to track expenses were time-consuming. They took effort and dedication to apply and many people simply got frustrated with the process and stopped tracking expenses or did a half-hearted job of it. Modern apps are powerful and really quick and easy to use. Once the process becomes a habit you will not even realize you are doing it.
Still, if you do not have a smartphone or you wish to do it manually, a pen and paper are all you need. Track your expenses and compare them to your budget either daily, weekly, or monthly. There is nothing wrong with doing it this way provided you have the time and discipline to do it accurately.
Using a spreadsheet on a computer will make tracking your expenses neater and easier to manage. You can do quick calculations and even generate graphs if that is your thing. It does, however, make the process a bit more time-consuming.
Another popular traditional method is to use envelopes. This works better if you work mostly with cash. You simply create several envelopes for various expenses and place the budgeted money into the relevant pouch. You might have envelopes for food, transport, rent, entertainment, clothing, gifts and so on. Once the money is depleted you should, in theory, not spend any more on that activity.
Many banks offer budgeting tools as part of your package. These generally work on their website, banking app, or both. It is normally a free service and some are quite good at helping you to track your expenses and avoid overspending. If you only use one bank and use your card for most transactions, they can be quite useful. They will save you some time as they track your expenses automatically when you swipe.
Budgeting and expense tracking apps
There are many to choose from. Here are some of the leading options:
This popular app has been around for some time, and many people find it extremely useful. It allows you to link your debit and credit cards and categorize transactions. It is highly customizable to the requirements of each user, making it quick and user-friendly. It can show you valuable insights at a glance to help you manage your expenses.
• YNAB – You Need a Budget
This app is targeted at modern young professionals and can be very helpful with budgeting and saving.
This is a fairly basic app but will help you stick to your budget and help you avoid overspending.
Another useful app, PocketGuard will link your accounts and help you track expenses.
Without tracking your expenses, you are likely to fall in the common habit of overspending. This will add to your costs and stress. The best way to improve your financial security is to use one of the easily accessible tools available and to start giving your expenses the attention they deserve.
One of the key drivers of financial success is to avoid overspending. Living within your means to avoid the never-ending and expensive debt trap is