Understanding Your Financial Habits

You may cringe when you hear the word budget but creating a budget doesn’t have to be complicated at all. It’s such an important part of maintaining a healthy financial lifestyle because it allows you to understand how much you bring in and how much goes out each month. As with anything else in life, it’s important to be intentional, and your budget should not be any different.

It’s not necessary to be too formal in how you keep track of your finances, any approach will work when recording the information, but your goal should always be to get it recorded. Here are a few ways to keep track of what you bring in versus what you spend.

Spreadsheet or Worksheet

Budgeting worksheets are overwhelmingly available for you to access online. You don’t have to reinvent the wheel. You can simply use any of the available formats to start out. Eventually, you’ll find what works best for you. One resource can be the consumer.gov website which has a nice worksheet available for you to use. Begin by filling in the information you know, such as your income and your debt. Then, if necessary, complete the other expenditure sections based on estimates to get started. As you begin to keep track of what you spend in the following month, enter that into the worksheet and see how your estimates align with your actual expenditures. You may be surprised that you spend more than you were actually anticipating. 

Leverage your financial institution

Most financial institutions that offer a checking account now also offer a monthly spending report to help track where your money is going. Many people are unaware of this feature, but it’s a very good tool to help understand how you spend your money each month. Sometimes it’s hard to keep track of all the purchases we make here and there, especially when they’re small amounts, but those small amounts can add up. It’s also important to keep all your ATM withdrawal slips so you can enter those amounts into your budgeting spreadsheet. Over time, those small withdrawals can add up to a significant amount. Using your financial institution’s spending report can prove beneficial in gaining an accurate picture of your spending habits as well because it tracks your utilization, whether by swiping your card or by your ATM use.

If you’re unable to access your spending report either online or through your bank’s app, then the next time you go into the bank, ask your banker to show you how to find this report or contact their customer service department for help.

Bank Statement

If your financial institution doesn’t offer you access to a spending report, you can simply use your bank statement to gain insight into your spending. View your last three statements and analyze them to see where the bulk of your money is going. Sometimes, you may be able to catch a previous preauthorization that you thought was stopped but is still being deducted from your account. This method can help you not only keep track of your spending but also keep track of other activities in your account. 

Understanding how you spend money and creating a budget can help you take control of your finances. So get started today by utilizing any of these methods to understand your financial habits better.

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TF Wealth Advisors, LLC

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