We all want to have a good feeling that our finances are under control and we are saving for the future, be it for travel, an important purchase or even for retirement. But, we all know that saving is not that easy and several times a year we come close to spending more than what we earned. There are several things we can do in order to reduce this strange feeling that money is always short. Today we want to present to you one of the best practices to make sure that you are maximizing your savings, which is to track your expenses closely.
Some of us believe that managing our expenses with cash is the best way, right? It sounds easy, if I only have that money in my wallet, I know how much I can spend. Wrong. As important as not spending more than what you earn is to understand and track what you are spending, so each one of us can understand where our money is going and what can be done to save that extra dollar at the end of the month.
Do you know that strange feeling when you know that you had $100 bill in your wallet and now you only have $16? That’s because when we manage our spending with cash only, we can’t track where the money is going, unless you are very diligent and write all your spending, which is unusual. A way to track spending is to use payment alternatives that allow you to see your spending, such as prepaid and debit cards, or even mobile payment alternatives. Cards, in general, allow you to see where you have spent your money and even consolidate category expenses to see what your budget expenses are on a monthly basis. There are other alternatives such as writing down each expense or even pay by check, but those alternatives are time consuming, and time is money.
Prepaid cards can be a better alternative to debit cards, because they don’t have overdraft fees and you can only spend what you have on the card, so it can be a great way to use it as “cash in the wallet”, but with the convenience of knowing where you are spending your money or they practicality of paying your expenses quickly and moving on during the day. Although bank debit cards offer you the same benefit, they generally have hidden and abusive fees that consume your extra savings at the end of the money and discourage you of using it.
Unfortunately, we can’t control our income, but we can manage our expenses and track them. It is one of the ways to make sure that the savings account is growing. Stay tuned at “imanagemyincome.com” web site, where we offer hints and best practices on managing finances for the working class population. Let us know of any particular topic that you want know more about.