8 Surprising Benefits of Tracking Your Spending

benefits of tracking your spending
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benefits of tracking your spendingWhen people ask where to begin with budgeting, my first answer is always, ‘track your spending’.

There are so many benefits of tracking your spending.

But before you can even begin to create a budget, you need to know exactly what you have got coming in and what you’ve got going out.

Making a list of your bills is the easy part – they are pretty much fixed and the same amount each month, so you know what to expect.

The hard bit is the variable expenses.

The spends that vary week to week, month to month.

Until you take stock of that, how can you budget effectively?

What is a Spending Diary?

If you are dipping your toe into the world of budgeting, I would highly recommend that you start by keeping a spending diary.

Ideally, you should do this for a month, but it should be at least a week or two.

During this time, don’t adjust your spending or try to rein it in.

The point of this exercise is to gain clarity over where your money goes and the only way you will do that is by being honest with yourself.

Grab a notebook, download an app or even just use the notes section on your phone.

Every time you reach for your bank card or pay for something with cash, note it down.

And I mean all of it – that £1.50 parking, the £2.50 coffee.

You might not think that small expenses make a difference but once you start tracking, you might find they add up.

So, that’s how you get started with your budgeting process.

And here are 8 surprising benefits of tracking your spending.

Benefits of Tracking Your Spending

Promotes the Habit of Checking in Daily with Your Finances

“The truth is, you don’t break a bad habit; you replace it with a good one.” – Denis Waitley

People like to tell themselves they are bad with money but they’re usually the same people who just bury their heads in the sand and ignore their financial situation.

This doesn’t make you bad with money. It’s just a bad habit.

Instead of ignoring it, check in on a daily basis. Do it until it becomes second nature and you’ll see the changes in your own beliefs around money without even making any drastic changes.

You might also enjoy…Money Habits You Need to Adopt Today

Creates Financial Awareness

Following on from the above, if you check in with your finances on a daily basis not only will your money management skills improve but so will your mindset.

You’ll become more in tune with your spending habits and how that greater effects your financial wellbeing.

Helps You Identify Destructive Spending Patterns

And as you become more in tune with your spending habits you’ll recognise your spending triggers.

You might go shopping out of boredom. Buy new clothes on a whim because your self-esteem took a knock. Or maybe you’ve had a stressful day and thought, ‘sod it – let’s order a takeaway’.

By getting into the habit of writing down these daily spends you’ll recognise the areas in which you’re your own worst enemy.

You might also enjoy…11 Ways You Are Wasting Money Every Day

Helps You to be More Intentional with Your Spending

Once you can recognise where your spending triggers are, you can be much more intentional with your spending.

Noting down £5 lunches on a daily basis or a £15 takeaway 3 times a week will help you to see where you are wasting money that could be put to better use.

There’s nothing quite like seeing it written down in black and white to help you recognise when something is excessive or needs to change.

By writing down your daily spends, you’ll be able to more consciously decide whether or not you actually want to buy something, next time you reach for your card.

You might also enjoy…How to Be Intentional with Your Spending

Identifies Budgetary Issues so You Can Adjust

You might have already tried to budget, but quickly gave up after blowing through it.

The thing is, a budget isn’t just about your income and your bills.

That’s only part of the equation. You might think that buying lunch for work here and there isn’t an issue.

But if it isn’t in your budget, it can quickly derail you.

Just £3 a day can add up to £60 a month – which is probably a larger amount than some of your fixed bills.

If you’re not aware of how those spends add up, you’ll never be able to budget effectively.

You might also enjoy…How to Create a Budget from Scratch

Reduces Money Anxiety

Burying your head in the sand when it comes to money is probably the worst thing you can do.

And yet, so many of us do that rather than tackling the problem head on.

By tracking your spending, you’ll be aware of your financial position and will feel less anxious about money.

You might also enjoy…How to Deal with Money Anxiety

Builds Your Confidence

Tracking your spending helps you to feel in control of your finances.

And feeling in control will help you to feel confident that YOU CAN manage money. And YOU WILL improve your financial position.

Confidence in your own abilities will kickstart your motivation and spur you on to achieve your longer-term goals.

Helps You to Achieve Your Goals

With confidence and motivation comes hard work and success.

Tracking your spending is like a springboard into better, all-round financial management.

When you crack it, you’ll be able to effectively set goals and work out the steps you need to achieve them.

You’ll see the areas where you tend to go over budget, highlighting your problem areas.

You can then work on these inefficiencies to ensure that the money you’ve been wasting in the past, works towards your goals in the future.

You might also enjoy… How to Stay Motivated to Achieve Your Goals

For more money motivation, follow on Instagram @katiesaves

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