You Don’t Manage Your Finances If You Don’t Track Your Expenses.
Here’s a shocking secret about money that regularly goes unnoticed: if you don’t track every dollar you spend, you are not really “in control” of your finances. Crazy, right?
As Makin Bacon’s personal finance blog succinctly writes, “You can’t change what you don’t measure.” If you’re trying to sort out your finances but can’t point to specific things that are costing you money, you are not actually in control of your finances at all. If your “budget” consists of rent, car payments, and “stuff” for half your salary, you are not making a budget. And until you really start tracking every dollar, you are fooling yourself.
Every time someone complains to me about their financial situation, I ask them the first question: “Do you track and record your expenses?” or “Do you know where your dollars are going?” Most of the time, they shrug their shoulders and say no. And so … that’s all, the main problem with their finances is that they don’t keep track of their dollars.
Personal finance software like Mint gives you all the tools you need to keep track of your spending. Start by using them every time you spend money. If Mint doesn’t work with your bank, create a spreadsheet . Write this down in a notebook. Whatever works best for you. But don’t just look at your bank account every few days and assume you know what’s going on.
You Can’t Change What You Don’t Measure | Makin Bacon via Rockstar Finance