So, you went to a restaurant for a cup of coffee, had some “you” time, reached for your wallet but shoot, where’s all your cash? You could swear there was a 20 taka bill in there somewhere, but now you have to exhaust your credit card or run to the ATM to pay the bill. And you can’t remember where all your monthly income flew away.
Well, then, my friend, you’re what they call a spendthrift. And the first step towards bettering your personal finance is learning to track your expenses. When you know how all your 10 taka expenses add up to a few hundred, you can start optimizing your expenditure.
Sounds solid, right? But … How can you keep track of your expenditures? Journal? Google notes? See, that’s where the real challenge begins. No matter what tool you use to track your expenditure, there’s no AI (not yet) inputting it for you; you have to do it yourself. So, how can you?
Tracking with The Right Instrument
Instead of a spreadsheet or a manual journal, I prefer to use an app called “Money Manager.” Mostly because it comes with analytics and it helps me better understand where I went wrong for a particular month.
But I won’t deny that this app comes with its shortcomings and there are tons other personal finance apps out there. But the Money Manager is simple and gets the job done so I never felt like switching.
It is important that you take some time and decide which app is best suited for you but you’d be wise not to spend more than 10 minutes on this. Most of the apps come with pretty standard approaches and unless you are a complex spender, you’re pretty much set with any of it.
Personalizing the Dashboard
I have seen many people skip over this apparent important step. You need to personalize the dashboard to be profited in the longer run. Create your own categories, personalize with icons. It will help you better sort and at times of haste, better manage your app as well.
But, be careful not to go too overboard in personalizing. If you add too many categories, you will be confusing yourself. Add generic categories, and attach a note at the end of every expenditure to help you remember, in case you need to trackback.
For example, there are only a few restaurants I regularly visit (yes, Burger King, you’re there). I can choose to add it as a category, but instead, I put it in the restaurants one and add Burger king in the details’ segment. It’s okay to skip all the micro details, but if you can, do write where you spent what!
Keeping at It with Buffer Categories
Now, what I personally always struggled with was the perseverance of it. And if I know you, there’s a chance you’re just as good a procrastinator as I am! So, yes, even if it sounds really easy to put in all the expenses in an app, we both know we’ll never do it EVERY DAY! So, what can we do instead of ultimately giving up using the tracker?
What I did was add 2 extra categories named “All Day” & “Unaccounted”. Sometimes when I was out all day and too tired to add expenses I’ve missed out, I add them to the all-day segment to keep at it.
But even then, I found I am succeeding in messing up my tracker. My money bag is still missing all those 20s that were supposed to be there. So, I added another buffer category called, “Unaccounted.” Say my app says I’m supposed to have 450 BDT in my pocket but I actually have 320? I credit 130 BDT as unaccounted. This way, even if you lose track, you can always get in line and start again!
Analytics is Important
So, how can you use it all to your benefit, right? See, that’s where the app wins over a spreadsheet. With analytics. As you can see in the picture, I can see all my monthly expenditures and also know what percentages each category has contributed.
Maybe, I had to struggle in the latter part of the month. What do I do? Keep my shopping in check. Maybe I had too much expenditure that was left unaccounted for. So, I try to put in a little more effort.
With analytics, comes the awareness and it can go a long way in helping you track, save & spend your money more wisely.
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