![]() ![]() You might realize that your habit of dining out or buying clothing from expensive brands is causing you to run out of money by the month's end. You might learn from tracking your expenses that you are paying monthly for a service you don't use (an unused gym membership, for example), in which case you could cancel the service or switch to a cheaper one. It helps you identify your spending issues: If you don't track your expenses, you will not be able to see the negative spending behaviors you have acquired. What you learn from tracking expenses helps make changes to the budget for next month that put you on better financial footing. If you spent too little, you might want to allocate more to the savings and debt repayment. If you overspent, look for ways to cut spending in a certain category. At the end of each month, review the expenses you tracked to compare what you spent versus what you planned to spend according to your budget. It helps you stick to a budget: If you don't track your money, you won't know when to stop spending in a given category (food or clothing, for example). Why should you keep track of your spending? It may seem like a tedious job to itemize your expenses when you first begin, but understanding why it's important to track expenses and how to do so with minimal effort can help you successfully commit to the activity and become more aware of where you are spending and how much. It's an essential activity that you must ideally do every day throughout the month. Tracking your expenditure involves identifying your expenses throughout the month. ![]() ![]() Know and understand what the new pattern would look like. That holds true even if you want to change your spending habits. For example, if you've spent years eating the same way, it's extremely obvious that it is tough to change that pattern. The challenge is creating a new normal, which involves behavioral change. Research shows that we automatically favor what is familiar to us: even if we know it doesn't add any leverage to us. Over time, it becomes more difficult to change a habit because that habit has evolved to be natural to who we are and how we act. The characters you grew up watching never had the need to plan for an early retirement. Media: We are victims to the media that preys on our temptations. ![]()
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