Do you earn a decent salary but are always broke? You can’t seem to get a handle of where your money went or how you spent it all.
The first step towards escaping this vicious cycle of mismanagement of your funds is to start keeping track of every cent that comes into or goes out of your life, trust me, the results will be startling.
What does keeping track of your money entail?
Every time you get money – whether it’s from a pay-check, a refund or picking up money from the ground- write it down. Every time you spend money – whether its paying rent, utilities, bus fare or giving it as handout to a beggar– write it down.
This might seem like a myth but tracking you’re spending helps to demystify money, you gain control of it, and you longer feel as though it controls your life. You will begin to perceive it as a tool and your awareness of your money habits are sharpened, allowing you to make changes to improve your situation.
Here are a few pointers that you will find useful:
- There are certain transactions which can be easily forgotten, most of which come without receipts. You should take precaution of such and you can take special steps to remember them.
- Making it a habit of keeping all your receipts in one place always so that you know where to find them.
- Process all your transactions daily, you might find this cumbersome but the longer you take to do so the less likelier you will find it difficult to remember a transaction.
- Make it a habit to track your spending, make it a second nature.
This exercise is aimed at painting a picture of your spending habits as they actually exist, and not as you think they exist. You can use it to create a budget, or, at the very least it can serve as a snapshot of where your money goes.
The first step towards regaining control of your finance is to accept that your finances are not in order and to identify why this is the case.
Try it out for 2 weeks and tell us how it goes.