Importance of Tracking Your Expenses

Have you ever wondered why you usually have little left days before your next paycheck? Have you experienced emptying your ATM just to pay your bills? I was in this predicament a couple of years ago.

I was spending on small things and I didn't realize that I was spending most of my salary on things that I thought was negligible compared to my salary. I used to regularly buy coffee during the morning right before I go to work. I would dine out twice or thrice a week with my girlfriend. I never realized that every peso that I'd spent splurging on those small things will add up eventually.
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When I finally decided that I wanted to invest in order to prepare for the future. I made a plan on which products to invest in and when I would start investing. When the date came I didn't have to money to open an account. This continued until I finally decided to track my expenses.



I initially started by just recording each peso I spent in a spreadsheet. Whenever I spent something I record it on my phone and input it on my excel file in the morning. After a couple of weeks of continually recording my expenses I began to see where my salary was going. I then made a budget on how much I should spend every week and made a commitment to stick with that budget. After a couple of weeks I added my credit card expenses, bills and kept a record on all my investments and income.


Knowledge on my expenditures proved to be invaluable in straightening out my personal finances. Within months I was able to fix my personal finances and eventually started investing in mutual funds and UITF. I no longer had to pay interests for my credit card since I was spending within my capacity. I was able to make better decisions in purchasing items and regulating my usual expenditures. I was able to make a budget and plan ahead of time on what bills I needed to pay.

Like most people, I belong to the majority of the population. I have limited resources which needs to be properly managed. It was only when I had a complete picture on my expenses and income that I was able to make sound decisions and good strategies on how I will approach my personal finances and investments.

1 comment :

  1. Taking on a lot of financial obligations is never sensible. It can weigh heavy on your income, and consequently drain out your finances, even those that you might have saved earlier.
    And yes, saving for the future isn’t really helpful. One should imbibe the financial literacy in him to know how to invest. Stagnant money never has the chance of growth, and unless you take on a bit of risk, you’ll never taste success. However, one shouldn’t keep all the eggs in the same basket during investing. That’s because if the basket gets hit, all the eggs will be ruined. One should therefore evaluate the risks and diversify the investments. Otherwise, he may risk losing all his hard earned money at one go.

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