Usually spend on the things you can predict in a year, divide by 12, and work on saving that amount each month.Īnd there you are: a brief rundown on tracking, the foundation of all the work we do at the PGH FEC! This task is always the first one, and perhaps the hardest. With infrequent expenses, it's great to leverage savings to have the money for them! Estimate how much you This is where the ever-important Emergency FundĬomes in! Which we’ll talk more about in a future blog. Though aĬredit card is a great way to pay for something in the moment, you want to be able to pay it off ASAP to avoid interest charges. Often expensive and temporarily life altering, these are the things that often get put on to high interest vehicles, like credit cards. Well (weekend spur of the moment getaway anyone?). Variable amounts: Gifts/parties for the holidays and/or birthdays, anticipated car repairs/maintenance, etc.Īnything unexpected: Life happens, which means you’re going to encounter unexpected expenses, usually of the not-too-fun variety, though they can be fun opportunities as Set/Stable amounts: When is your car due for registration? Or your driver's license? Subscriptions that are due annually? Things along these lines. It includes the money you might spend every few months, every year, or even just once in a lifetime. Tracking doesn’t just include what money you usually spend in any given month. Of Game of Thrones ended and haven’t been back since? Infrequent expenses. Are you using all your streaming services that you pay for? Or are you still paying for HBO YEARS after the most recent season #ProTip: Track your app/streaming service use. These sneaky sneakers eat up a surprising amount of money! Keep an eye out for them as you track and see if you can minimize them or get rid of them outright. Survive without: dining out, entertainment, travel, etc.), and 20% towards Savings andįinancial Goals (paying down debt, saving for both short and long term - a car you want, a big trip, a house, retirement, etc.) Look out for hidden fees or things you could've sworn you cancelled: (the basics you need to survive and bring in an income: rent/mortgage, transportation, utilities, groceries, insurance premiums, etc.),ģ0% towards Wants (the extraneous things, the spice of life! Things you can Think about your spending: 50% of your income should go towards Needs #ProTip: Utilize the 50/30/20 rule! HThis is a nice way to sustainably You want to have categories that are meaningful to you and easy to ![]() This is a great way to map your income and spending onto the month (and, eventually, year)./p>ĭon’t fall into the trap of making one huge “miscellaneous” category, but also avoid making every single purchase its own category. #ProTip: Track your income, too! How much do you get paid, and how often? What bills come out of each check? Utilize a budget calendar. That gets automatically deducted on the 5th of every month? That too! No rounding, no cheating! That can of soda you buy for $0.50 at the office? Track it! The internet bill you spend money on, and the exact amount you spend. With these thoughts in mind, here’s some ideas on how to get started: The Tracking TL DR Should really be us who control our money. Be prepared toĮncounter some serious emotions and find healthy ways to unpack how to manage these emotions as you work towards your financial goals. ![]() It’s an on-going process, and one that involves a lot of FEEEEEELINGS. This task is not a “one and done” or “set it and forget it!” type of deal: you build a budget based on how much you can (and want to) spend in various categoriesĪnd then track to see how close you are to those limits. ![]() The important - and,įrankly, scary! - part of tracking comes in when you remove the wool from your eyes and take a hard look at where your money is going and think about if that’s where you want it to Think about if that’s how much you want to be spending, or even if you can actually afford to be spending that much. It’s one thing to write down all your spending but never actually I like to tell my clients that tracking their spending money is the foundation of financial empowerment. But that’s only the beginning of tracking. Lots of credit cards and banks offer basic expense tracking in their online interface or app. “Doesn’t my bank account and credit card already do that for me?” We talk A LOT about expense tracking in financial counseling. Looking to hop into the financial empowerment journey? Start with Expense tracking the right way.
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