Quick Self Check:
Do you always run short of money before next pay day?
Do you always caught in surprise at end of the month where had you spent all your money?
Do you have difficulty to save some money from your salary?
By practicing expenses tracking will help you get out of these.
Important of Expenses Tracking
Everyone know how much they earn monthly but not everyone manage to tell how much are they spending on each month.
Most of the people in the world does not track their expenses. It's not surprise to learn that nearly 70% American have less than $1000 in their bank and one third of Brits have less than £600.
Benefits of tracking expenses are:
Known where your money spent
Identify Spending Issues
Be aware of unauthorized charges
How to Track Expenses
You can start tracking your expenses by recording your daily expenses in spreadsheet or various budgeting application for Windows as well as Android which you can find from the web. Pick one which fit your need. Define your own categories for each expenses in order to Analyze your spending habits later. You will be surprise to learn how much you spend on certain area when you start writing it down.
With Personal Financial Planner, we recommend few important categories as follow:
Education (Self, kids for those who are parents)
Parent (Contribution to parents)
Transport (Petrol, car service and repair)
Utility (Water, Gas, Electricity)
SavExp (Savings Expenses, will discuss more at Manage Savings)
Tracking Expenses with Personal Finance Planner
Row 41: Salary payment of $2000 received in bank at 1st of January. Notice that money received is recorded as positive value.
Row 42: $40 spent on petrol with credit card, recorded as -40 indicating money out.
Row 43 and 44: Cash spent on lunch and dinner.
Cell G13: Remaining cash on hand when you check your wallet at end of the day, which for example is $280.
Cell G11: Cell Daily Expenses shows that there are $2.30 unrecorded expenses.
Daily Expenses Explained
Daily expenses in Personal Finance Planner shows unrecorded amount spent in cash. Although we should try to track each and every expenses, sometimes you will just missed out some small amount of expenses for example buying a drink, tipping, or even simply misplacing your change in drawer or car would make your account unbalance.
In my opinion, instead of cracking your head to hunt down where each and every single cent are spent, we can allowed some of these non tracked spending to make our life easier. Of course, when the amount is big, you should recall where you actually spent those money.
In order to make the account balance, we can make use of a category named Misc to keep track of the amount of lost tracked expenses as shown. You can make use of Daily Limit at cell I11 to cross check your daily misc spending. This feature only valid for cash, as all other accounts can be tracked from account statements.
Step by Steps:
Enter the daily expenses amount as Misc, Misc as shown.
Set Last day in cell A11 as today by pressing ( Ctrl + ; ). This will reset the calculation of Exp / Day.