Keeping track of your expenses on a regular basis will give you an accurate picture of where your money is going. A 5-step program for those learning to budget.
The basis for action is a plan. The basis of the plan is information. So, in order to start keeping track of personal expenses, you must first find out what we have.
Step 1. If you use the Internet bank and pay for purchases mainly from a card, go to your bank's personal account at full speed for an account statement for the last month.
Step 2. Determine your money habits by taking an inventory of all your accounts, including checking account and all credit cards you have. At this stage, reviewing your accounts will help you determine not where you are spending, but how much money you spend on a standard monthly basis.
Step 3. Break down expenses by categories: "food", "transportation", "beauty", "utilities", etc. Many banks automatically tag your purchases with the appropriate categories, use this help.
An important point to note here is that your expenses will be composed of fixed and variable costs. Fixed costs change less frequently from month to month: they are the same mortgage or rent payment, they are approximately the same utilities, the standard insurance premium, or the standard payment for routine debt repayment. There is little that can really be changed. You will have more room to adjust for variable expenses such as food, clothing, or travel.
Step 4. Or find a convenient budgeting application for you, there are quite a lot of them now, or if you are not a fan of "unnecessary" applications, if you are against the visual noise on your phone, a spreadsheet is suitable for you. This is another valuable money tracking tool, and there are many free budget templates online. Find a convenient one for yourself and fill it out.
Step 5. Decide what can be changed. For example, you took an inventory and found out that you have a habit of taking a taxi to work in the morning. This is not a bad thing, it means that you value your time and comfort, it is worthy of respect. But financially, this habit of taking a taxi every working day costs you, for example, 2,000 rubles a month: 100 rubles every morning 5 days a week is 500 rubles a week and about 2,000 rubles a month.
These are variable costs. What can be done? Rebuild the morning, get up early and be on time for public transport: metro or bus. It will cost more in terms of time, and in terms of money it will cost you at least half the price (depending on the prices in your city). And if you study the fares for the pass, it will save you an additional amount on an ongoing basis from month to month! And on the way to work, you can now, for example, read or listen to your favorite music, tune in to a productive day.
Here are five easy steps to keeping up with your budget. Have a productive day everyone!
