Did you know that 53 percent of Canadians are struggling to pay their bills? Most Canadians would not be able to afford a sudden expense of any kind and many of them are skipping on some non-vital spending like major purchases, extra trips in the car, and vacations. Saving money is not even in the picture.
With such a thin money buffer standing between regular Canadians and financial disaster, learning how to track spending and how to reduce spending has never been more important.
Read on for some of the guidance Kingcash.ca offers to help you track and minimize spending.
How to Track Spending: Choose Your Tools
Tracking your spending requires keeping a record of where every dollar goes. Whether you prefer a more old-fashioned method or something high-tech, there are different tools to consider.
Pen and Paper
If you want simplicity, choose pen and paper records. Physically writing things down requires your brain to be engaged with what you are doing. An active brain will be likelier to help you make more mindful spending choices.
If you do choose pen and paper as your tracking method, have a system to remind you to write every expense down. You may want to have a pad in your car so you do not forget to record even the smallest of purchases.
The envelope system’s goal is to help you pay for as many purchases as possible with cash. At the start of the month, you put cash into the envelope along with your budget. Paying for groceries, restaurants, and entertainment with this cash can make you pay more attention to everything you purchase.
With this system, you know exactly when to cut back on your spending because you will see the money supply in the envelope disappear.
Being able to physically see when you can no longer afford certain expenses can also let you reach out for help much more rapidly to services like Kingcash in case of spending emergencies.
Spreadsheets will do the math for you. With all of the styles and types of spreadsheet options available, and with the options they offer to customize your budget as needed, they can be the right tool.
Prepare the spreadsheet with spending categories and do not forget to input every single expense as well as every bit of income.
You carry your phone with you at all times, so having a budgeting app at your fingertips ensures you never forget an expense. You can set up all of the spending categories you have and customize your budget from month to month. Budgeting apps offer the right level of convenience and you can back up your budget to the cloud to have access to it from any device.
Create a Budget
You will not be able to track expenses and know what your limits are without having a budget. A budget gives every dollar a purpose: spending, saving, or giving.
To create a budget, begin by listing your income. Note every paycheck as well as side earnings. If you have an irregular income, look at what you have made for the past few months and list the lowest amount as the income.
List your expenses next. List them in some version of the following:
- Giving (10 percent of your income)
- Vitals (food, utilities, housing, transportation)
- Other essentials (insurance, childcare, debts)
- Extras (entertainment)
Subtract your expenses from your income and you should end up with a zero. If you have money left over, consider saving it for emergencies. If you end up with a negative number, lower your spending in the areas you can.
Remember that some months can have one-time expenses, like purchasing school supplies, or buying holiday or birthday gifts. Use your calendar as you create the budget so there are no surprise expenses throughout the month.
Track the Money You Make and Spend
Add every dollar you make to your income section and subtract every dollar you spend from the corresponding budget line.
To make keeping track easier, you can decide to pay for a particular bill on the same day every month and choose to automate as many payments as possible so you can subtract them from your income right on the first day of the month.
You want to track the expenses regularly. Go over them every day or once a week. If you are married, ensure both of you are following the same budget and are noting purchases down.
Plan for Emergencies
Setting aside a small sum for emergencies can create a buffer in your budget for surprise expenses. If you do not have a margin for saving, you want to know what your options are if you need money quickly.
Choosing quick loans like those Kingcash offers can be a solution since the process of approval is fast. You do not have to go through a long bank loan process and you can even apply for a loan from your home.
Manage Your Spending
Learning how to track spending and how to budget can transform your finances. When you know exactly how much you will spend in any given month, you will be able to plan for the future.
If emergencies do arise, you want to know you have help available. At Kingcash, we know urgent money needs can pop up at any time. By filling out a simple application online, you can receive the loan directly in your bank account in a few hours.
If you need a bit of help this month, get a loan right now!