Track your spending to take control of your money and your wellbeing!

How to track your spending to take control of your money and wellbeing

It’s so important to know where our money is and what it is doing for us. Appreciating what money can bring you and knowing the potential and future of your money brings you feelings of security and comfort. Peace of mind is so crucial to our overall well-being. Budgeting can bring you feelings of being safe, even if you don’t have all the money in your pocket yet.

Starting is the hardest part. Know that the sooner you build these foundations the closer you are to financial freedom. So grab your latest paycheck, write down your priorities, and make a plan.

Take time out and write down what matters to you. Then put these values in order of most importance. Be honest with yourself and asses for spending your money on really means for you. This could be your love for your home and being surrounded by art and indoor plants, so paying your rent or mortgage, home repairs and improvements, and even bills are important to you. Or your love for interaction and connection is highly valued and you have a need to be social, so your spending priorities are about dining out, experiences with others, and entertaining.

The next step (for most) is to set your goals. What do you wish you could do more of or feel more comfortable doing? Do you sometimes spend your money and feel guilty but do it anyway? What would financial freedom look like to you?

Having a clear understanding of your current income and expenses is a great base. This can be done the old-school way, pen and paper, or by creating a budgeting spreadsheet. These days most of us have phones in our pockets where we have the capabilities of linking our accounts to specific budgeting apps. Many budgeting apps are free and allow you to sync all of your finances in one place; daily spending, savings, credit cards, loans, super, and investments. Some apps even link buy now pay later and cryptocurrency so you get a 360 view of your net worth. These apps categorise your spending so you can clearly see where your money is and keep track of your regular payments and any due dates. I also love watching my savings grow, it’s great motivation to keep at it.

Here are a few apps that are definitely worth researching; Frollo, Canstar, and WeMoney. They are great trackers of your overall spending. Splitwise and Beem aren’t necessarily budget-focused apps but log your spending where you can split shared expenses with your household, friends, or family if they too download the app. There are many more apps out there to help you track your spending, and put the time into the research.

It is also worth looking into what your current bank(s) offer as they often have budget features where you can set up automatically categorizing viewing over differing time periods. Some banks offer round-up features on transactions where the round-up goes into your savings accounts. (See lprevious blog on micro-investing)

Once you have a strong understanding and history of your spending you can assess where your money is going and create a budget. The 50-30-20 rule is a great way to analyse where you are overspending. This means putting 50% of your income towards your base ‘needs’, 30% towards any ‘wants’, and 20% towards your savings. This last component of 20% can be broken down into 15% towards future goals savings and 5% into a short-term savings account for any unexpected expenses. Always keep in mind your values and goals and ensure your budget is working towards this.

So after all that, if you are not feeling like budgeting is in the near future for you. There’s the option of ‘anti budgeting’ which is where you calculate your base living costs and ‘pay yourself’ this amount leaving a balance in your account for spending. This can be set up as automation so you don’t overspend and always have enough put aside for bills and general living. This approach gives you the freedom to enjoy the rest of your pay. Assess the balance in this ‘fun spending’ account before your next paycheck as the balance can top up your savings.

Budgeting is all about working towards your goals whilst upholding your values, otherwise what really is the point? Healthy spending habits, factoring in retirement and saving money for a rainy day will lead you on a path to financial freedom!

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Phoebe is available for interviews, guest appearances, article commentary, and talks on a range of topics relating to property, mortgage broking, and personal finance (particularly for women!).