To budget is to organize your money in a way that you know what your income and expenses are while to track is to keep the records of the expenditures.
Personal financial management is not a very popular practice in Nigeria; Here are some practical steps to take which if adhered to, would enable you to successfully track your spendings periodically, say on a monthly basis.When you budget and track your money, you are able to see the areas where you need to spend less, and then make the necessary adjustments and thereby making more money available for other purposes.
Nigeria is a cash-based economy, most times we do business transactions with
cash and keeping trail of the spending is difficult but, following these steps would make it easy for you to know where your money goes.
Here Are The 5 Steps You Take To Track Your Spending.
1. Always Have A Pen And A Notepad: Keeping a pen and a notepad within your reach all the time enables you to write down every penny you spend. There are minor expenses that can easily be forgotten unless you consciously take note of them. Several times in my office I send for a not that expensive thing and I forget that I spent that money; but now that I’m always with my notepad, I do jot down. I also record all the unexpected purchases.
2. Categorize Every Item You Will Spend Your Money On, For example, you can have headings for rent, school fees, bank account charges, credit card charges, loan and mortgage payments, offerings, shopping, a gift to family members, charity etc. All should be categorized in different columns. This makes the final accounting easy and fast.
3.Budget Every Naira And Kobo And Do Not Go Shopping Without A-List: Make a list and attach an amount of money to every item in order to know what you are spending your money on.
This is to make it easy to tally the numbers at the end of the week or month.
Secondly, it will help you to know how much you are spending on each item and where to make adjustments if need be. When you budget your income, you will know what your expenses are.
Do not go out without putting a limit on your budget so that you do not spend more.
4. Keep The Receipt Of All Transactions:Whether it is water bill, light bill, shopping receipts, ATM transactions, deposit slips, cable receipts, tax returns, insurance payments, car repairs, hospital visits, fuel payments, offerings, tithes,
charity, etc It is best that you request a receipt for all your transactions and
keep for record purposes for at least six months.
5. Have Print Out Of The Statement Of Your Bank Account: This would provide the basis for you to compare all your expenses and monitor your cash flow. Always request for your statements of account to guide against unnecessary charges.
Not being smart about money through not tracking your funds leads to the accumulations of debts.
I have been tracking my spending for years and I know what I use my money for. I discovered that budgeting was the missing link and I started budgeting in 2015; since then I have been able to settle some of my debts and I also have some savings.
How do you track your money? Please share with us.