How to Keep Track of Your Expenses

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How to Keep Track of Your Expenses

It’s important to know how much you need to spend each month, how much you have available to spend, and how much you have to put away for big ticket purchases and unplanned expenses like emergencies. There are plenty of fancy tools and calculators to help but if you want to simplify your life you can break it down to 5 simple to follow steps. After reading this article you will know how to keep track of your expenses.

Review Regular Monthly Bills

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These bills usually don’t change each month. The fact that you have to pay them each month is a given. Some may change slightly in amount from month to month based on usage, such as the electric or heating bill and may change more over time based on the seasons, but overall the fact that you have them to pay each month won’t go away. If you can take an average over the last year and use that to help plan your expenses each month, this will really help.

Track & Review Regular Out-of-Pocket Expenses for 1 Week

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If you know how much you spend on things such as groceries, going out to eat, gas for the vehicle, and other miscellaneous expenses in one week, you can better judge how much that impacts your spending for a whole month. Some things only come up every so often and you can judge for those, but for the most part you can judge out-of-pocket spending based on reviewing one week.

Review Upcoming Big-Ticket Expenses

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If you know you will need new appliances, or you need to save for a car, or perhaps you are planning for a new baby, or a child is going to college, you will need to put some of your extra money aside for these expenses as part of your current expenses to plan for the future ones.

Plan an Emergency Fund

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Emergency expenses can’t be planned for unless you have put those “unplanned” expenses on your current agenda and put them on each month’s expense tracker. If you put a bit away each month as an expense line item and put that money aside, then that expense was planned for and it’s not as much of a shock when it comes up.

Write Everything Down!

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Every time you put money away, write it down. Every time you spend something, write it down. If you charge something to a credit card, write it down, and then write it down when you make a payment. When you write something down you are making yourself more accountable for where your money is going.

When you are more aware of where your money is going currently and where you actually want it to go, you are making a plan to not only put money in the right places in the future but also be more responsible with how you want to spend money that might not have been going to the right places in the past.

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