Why You Need to Track Your Spending

Tracking Your Spending

Keeping track of your spending is a crucial aspect of effective money management. Unfortunately, many people struggle with managing their finances due to a lack of understanding of where their money is going. Whether you’re trying to save money, pay off debt, or simply live within your means, tracking your spending is a must-have tool in your financial toolkit.

Before you can make a budget, you first need to have a clear picture of your purchases and recurring expenses. There are many options available from a manual notebook or Excel spreadsheet – however, these manual tools can quickly become outdated if you fail to update it for even just a few days. An expense tracking and budget app can help solve this problem by providing you with a detailed overview of your living expenses automatically.

The Benefits of Tracking your Spending

The most important rule when managing your money is to spend less than you make. Tracking your spending lets you know exactly where your hard-earned dollars are going. Here are the benefits of tracking your spending:

  • Better Financial Management:

    With a budget app, you can easily track your spending and get a clear understanding of where your money is going. This information is essential for making informed decisions about future financial planning.
  • Avoid Over-Spending:

    Without tracking your spending, it can be easy to overspend on things like dining out or groceries. A budget app can help you identify these areas of overspending and make adjustments to avoid it in the future.
  • Faster Financial Goals:

    Whether your goal is to pay off debt, save money, or invest, a budget app can help you reach your financial goals faster. By tracking your spending, you can create a budget that aligns with your goals and helps you reach them more quickly.
  • Reduced Stress:

    When you’re not tracking your spending, it can be easy to feel stressed about your finances. With a budget app, you’ll have a comprehensive view of your finances, reducing stress and giving you peace of mind.
  • Better Planning:

    By tracking your spending with a budget app, you can plan for expenses that come up throughout the year, such as holiday gifts or annual bills. This will help you avoid overspending and ensure that you have enough money to cover these expenses.

3 Steps to Master Your Money

Mastering your money requires a combination of managing your personal spending, tracking your expenses, and creating a budget. When you don’t pay attention to your spending habits, it’s easy to overspend, accrue debt, and live beyond your means. By keeping track of your expenses and monitoring your spending, you can identify areas where you’re overspending, make necessary adjustments, and avoid debt and financial stress. By following these three steps, you can take control of your finances, achieve financial stability, and build long-term wealth. Here are a few tips for using these strategies effectively:

  1. If You Spend Money, Track It

    The first step in tracking spending is to connect your accounts through your budgeting app. This will automatically pull in all of your transactions so you can then evaluate your current financial situation and determine what your financial goals are. Setting goals will help you determine how much you need to set aside each month to reach your goals. Once you have a good idea of your income and expenses, you can prioritize your expenses and set aside the necessary funds for each one.Staying organized is key to successfully tracking spending. With Apps like MoneyWellth, it’s important to regularly review your spending categories and ensure all of your expenses are tagged correctly so you can get an accurate picture of where each one of your hard earned dollars is going.
  2. Create a Realistic Budget and Stick to it

    Creating a budget is important for a variety of reasons. First, it helps you to stay on top of your finances and manage your money effectively. By creating a budget, you can track your income and expenses, and identify areas where you can cut back on spending or increase your savings. Budgeting also helps you to plan for the future, whether that’s saving for a big purchase or building an emergency fund. It can also help you to achieve your financial goals, such as paying off debt or saving for retirement. Using a budgeting app can make the process of budgeting much easier and more convenient.When setting your budget it is crucial that you are honest with yourself, and set budget that reflects your spending habits, albeit improved. Starting off with a budget that requires you to cut back your spending by 50% is unrealistic for the vast majority of people. When setting your budget limit for a specific spending category – for example, Dining Out. If you spent over $500 each month for the last few moths, a good place to start could be setting a goal of $400 a month. You can continue to cut back in the coming months but your top priority when first getting started is to set a budget and stay within it.
  3. Set a Regular Cadence for Tracking

    The key to successful tracking is to set a regular time to review your spending and make adjustments as needed to ensure that you are meeting your financial goals. The app will anatomically categorize your transactions, and it is key that you assess those categorizes and tag your purchases in a way that makes sense to you.If you can, you should review and update your spending tracker and budget a least once a week. At a minimum before each paycheck you should update your budget so you have a plan in place for the money coming in. Revisit your budget regularly to ensure that it’s still aligned with your financial goals and adjust it as needed
Why MoneyWellth is the Best Budget App for Tracking Spending

When deciding what is the best budgeting app for your needs, it’s important to understand how these apps make money from their users. If a budgeting app is making money from offering financial advisory services, it may recommend investments that are not necessarily the best options for the user, but instead are the options that generate the most revenue for the app. Apps that fall into this category include Mint, RocketMoney (formerly TrueBill), and Personal Capital.

MoneyWellth has a vast library of videos, articles, blogs, and courses that cover everything from paying down debt to planning for retirement. The app provides genuine advice without pushing products or services on its users. In addition to personal finance education, the app allows you to connect all of your accounts and credit cards to track all of your finances in one place. Effortlessly track subscriptions and see where you’re spending the most with the subscription tracker widget. Set budgets and get notified when you’re approaching your set limits so you can take control of your finances and focus on building wealth.

It’s important to note that MoneyWellth is currently only offered to employers as a benefit they can provide to their employees to better manage their personal finances so they can live happier, healthier, more productive lives. You can ask your HR manager about MoneyWellth to gain access to the app. MoneyWellth is launching to the public in the Fall of 2023, you can join the wait list now.