At some point, we’ve all experienced the “black hole pocket” phenomenon, where we go broke instantly after getting our paychecks. If what we spend our money on is a product of many small choices, how do they always seem to drain our wallets?
Maybe what you need is a budget.
How to Effortlessly Track Your Spending
Tracking your spending regularly can give you a more accurate picture of what you’re doing with your hard-earned money.
Here’s how you can easily track your weekly and monthly expenses.
1. Connect All of Your Accounts on One Dashboard.
If one of your credit cards isn’t with your primary bank, you’ll have to go back and forth between multiple dashboards to get an idea of what you’re spending. It’s easy to forget how much you’ve rung up your credit cards when you can’t see them. This may cause you to spend more.
But if you sign up for a budget and credit monitoring app, like one from SoFi, you can track your spending all from one platform. Now that you have a bird-eye view of your financial history, you can track your spending, create a budget, and monitor your credit score without any headaches.
2. Explore Other Desktop-Based Expense Trackers.
While budget templates and worksheets aren’t as high-powered or convenient as apps, there are still great reasons to use them. For example, if you’re a small business owner that can’t justify the cost of accounting software, an Excel spreadsheet can help track your spending.
But if you do have a more complex financial portfolio, you should buy software. For example, Quicken Premier lets you monitor your investments and import your bank transactions. It would be incredibly time-consuming to track all of your assets with free worksheets alone.
3. Categorize Your Expenses and Account Statements
Once you can log into your dashboard, start pinpointing your money habits. Take an inventory of your accounts and get a sense of your monthly cash flow (what’s going in and out). Check how much of your paycheck is going towards specific expenses and if they’re necessary.
Start grouping your expenses into two categories: impulse buys and necessary purchases. Some items that look like impulse buys, like clothing, may be needed, but some necessities can be left out. For example, you need a blazer for an interview, but you don’t need Starbucks.
4. Consider What Impulse Buys You Can Live Without.
Just because you make a lot of money, it doesn’t mean you should spend it all. Multiple studies conducted on Millennial spending habits found that lifestyle creep is common. Millennials who make six figures a year are still drowning in credit card debt because they’re spending more.
Sure, you may need that blazer for an interview, but do you need one from Versace, or will a $75 Nordstrom jacket do? Take a hard look at the items in your closet, home, and backyard and ask if you need high-cost versions of products when they’re eating away at your savings.
5. Don’t Make Your Spending Journal a Guilt Trip.
According to a Mind over Money survey, 77% of Americans report feeling anxious about their financial situation. If you’re the kind of person who copes with stressful situations by avoiding them, you’re either going to live without a budget or feel guilty whenever you make a mistake.
While it’s easier said than done, don’t beat yourself up when you overspend, especially when you start. Your first two weeks of budgeting should be passive, so try to stay calm once you see a pattern. At the start of week three, you can start making changes you’ll eventually stick to.