Nearly a third of all households in America live from paycheck to paycheck. Even families and individuals on medium and high incomes believe that they are saving less than they should. Overspending is a risk if you don’t adhere to a strict budget, and if you don’t have an efficient way to track spending.
Tracking your spending is important and it’s not as difficult or as tedious as you might think. Here are the dangers of not tracking your spending, along with suggestions to help keep you within your budget.
What are The Most Common Ares of Overspending?
Overspending often comes from the smallest purchases, which is why it’s so easy to overlook until it comes to the end of a pay cycle and your bank account is near empty. Some of the most common areas of overspending for young people include:
- Paid smartphone apps and games.
- Daily coffee and eating out.
- Impulse online or retail shopping.
- Micro-Grocery Shopping (it costs more when you don’t do everything in one trip).
What Happens When You Overspend?
The downside to overspending is simple: you end up with less money for savings and for paying debts. This can lead to credit card spending or loans when you exhaust your cash and bank account. This spiral of debt can be hard to recover from.
Simple Solutions to Track Your Spending
Even with a basic budget it can be hard to keep track of day to day life. The simplest way to stay on top of your spending (and make yourself accountable for every purchase) is to use smartphone apps to track every dollar.
- Mint is available on Google Play and iTunes for your smartphone. It’s a budgeting, bills, and finance app that can help you to track your spending and minimize expenses.
- Money Manager Expense and Budget is a similar app that allows you to track and plan your spending. It’s available on iTunes and Google Play.
- Many banks now offer spending trackers to help you keep on top of credit and debit card spending. Talk to your bank to find out what they have available for your smartphone.
- Keep your receipts! Tracking your spending is all about developing accountability. Keeping all purchase receipts will allow you to sit down and review spending at the end of the month.
When you commit to tracking your spending, you will be able to keep within a budget, minimize unnecessary spending, and ultimately save money that can be used for an emergency fund or getting out of debt.