There are many components that need to come together for successful financial planning, and one of them is having at least a fairly accurate idea of how much you spend to maintain your lifestyle.
But clients tell us that tracking their spending can be an onerous task. In fact, some say it’s the part of creating a financial plan that they like the least. There are several reasons for this, and one of them is the tedium involved in adding up everything you spend.
The good news is, you have many options for accomplishing this task. I’m a bit “old-school.”I sit down with a pad of paper and my monthly bank statements and credit card statements for relevant accounts. Then I start writing down numbers and and adding them up. It can take a while to do this, particularly if I am doing a whole year’s worth of numbers, but it works for me.
If my method doesn’t sound appealing to you, try a different one. Here’s an article from Forbes that offers several ideas for tracking expenses, including categorizing them by the stores you shop in, rather than trying to figure out whether you spent the money on clothes, groceries, or something else.
Maybe you’d prefer to use an app. If so, NerdWallet has compiled a list of the best budget and personal finance apps for 2019. It’s similar to the Investor Junkie list that Maura Madden mentioned in 2017, but it contains some useful new additions.
Please take a look at these articles and select a method that works for you. With all the choices available today, you’re sure to find some tool or technique that will help you get a grip on where all your money is going.