September 12, 2017

Want Financial Freedom? Start Tracking Your Costs

I had written about keeping track of costs before and it deserves to be written again.  I am a big believer in saving and spending within my means.  You hear a lot of people who are able to retire at age 40 or others who start exploring the world when they haven’t entered their golden years yet.  This is do-able for them because they were able to save.

To truly start saving people have to keep track of their costs.   That means writing down the cost of every coffee you buy, tracking every grocery trip, and dining out adventure.  Even if you only do it for a month, still do it.  The reason is an expense tracker can help you see where you are spending a lot on and how much you can potentially save a month.  I use an online google spreadsheet to update my spending.  This is convenient for me because as long as there is an internet connection, I can go on any computer to update my expenses.  I tried updating it with my phone but it is a pain to use (could be my fat fingers).
I have shared the spreadsheet with you here and it downloadable on the resources section as well.  
What I really like about the expense tracker I created is the pie chart and the categories.  The pie chart shows visually what the big spending ticket items are: 
As you can see, the top 3 items in the chart above are the mortgage payments, savings, and eating out.  

The second bonus with this spreadsheet is the categories.  The categories allows you to breakdown exactly what you spend on.  This is the key part.  If there is a category you spend a lot of money on and you want to track it, then create a label for it:  Under the Monthly Expenses table, change one of those categories and start using it as you track your spending throughout the month.  
I have been tracking my monthly expenses for over 5 years now.  One expense category I spend a lot of money on every month is eating out.  I even talked about my eating out habits before in my prior post on budgeting.  The expense tracker helps me be mindful of how much and how often I eat out.  
If you choose not to use this expense tracker and you want to use your own then by all means do so.  The spreadsheet that I use is just something that suits me and it is quick and easy to update.  There are a lot of expense tracking apps out there on iTunes and Android if you choose to use something else.  
Other Budgeting Tools:
If you already use a budgeting tool then do check out Financial Post’s other budgeting tools.  I came across this by accident.  The Financial Post website has a few online tools to analyze your financial situations, from mortgage calculator, mortgage qualifier to home budget calculator.  I’m not paid for suggesting Financial Post, it is something I found useful to share with you.
You can find the tools here: 
     Mortgage Calculator
     Mortgage Comparision
     Mortgage Qualifier
     Home Budget Calculator
     Investment Calculator
     Savings Calculator
     Currency Converter
     How to be a Millionaire

Tracking your expenses is not a difficult exercise and it really helps make you to be accountable to yourself.  You might even save yourself a few couple bucks along the way.  

If you have any questions with the file or comments, let me know by posting below.Calculator and Financial Bill

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