A huge part of being on top of your finances is being able to keep track of your spending habits. This involves keeping receipts from purchases, checking the money you’ve spent against your monthly budget and making sure you aren’t buying unnecessary items - every cost needs to be justified. Why does this even matter? Here are 5 reasons.
Reaching your financial goals
We all have large and small financial goals. If you’re looking to make a purchase that you haven’t saved up enough for, keeping track of your spending is a good place to start. This will help you see which of the items you’ve been spending on is essential, and which are not. From here you can cut down on non-essentials and save more money.
Where’s your money going?
It’s always good to know where your money’s going. Overspending on things that you don’t need and overlooking the bigger priorities will strain you financially in the long run.Create a monthly budget and stick to it, and look into new way to save as much money as possible.
Tracking your habits
We all have weaknesses when it comes to spending, and that’s okay, but as an entrepreneur, your financial downfalls don’t affect just you - they also affect your business. Identifying your spending habits is a good way to change the way you see money and help you make better decisions. You can do this by writing down items you are thinking of buying and listing their benefit against their cost. If the benefits outweigh the cost, then the spending is justified; and if not, then you may need to park that item for a while.
Going through your bank statements can give you a clear indication of what you’re spending the most money on, how much you’re being charged for transactions, and whether or not there are any unauthorised charges going off your account. If you do see strange or unauthorised amounts debited on your bank statement, then you’ll need to contact your bank so they can investigate. Don’t write off small unauthorised debits, either, as these accumulate and make large amounts over time.
Getting priorities sorted
Being more organised and intentional in your spending helps you get your priorities right. If you have a budget and sort out your purchases in order of priority based on the cost-to-benefit list we spoke about, then you’re more likely to be responsible with your money. This means you’ll have your priorities in check and have money going towards saving and items that matter most.
You work so hard for your money and it’s only right that you spend it wisely. Plus, it’s always nice to have a bit of extra money that you can either save toward a rainy day or spoil yourself a little bit. If you need a bit of help with the day-to-day runnings of your business, here are a few tools. Don’t forget to follow us on our Facebook and Twitter pages for more #FinacialFitness advice.