Keeping Track of Expenses
Most people have a hard time keeping track of their expenses. The reason I think is because it is just to troublesome to keep track. Although I consider myself a rather discipline person when it comes to money and finances, I hated it when it came to keeping track of daily expenditure. How much fun can it be to mark down every single item that you spend your money on? On top of that, I had to total up the figures at the end of the month and counting a few dollars here and there for lunch, snacks, parking other miscellaneous items just wasn’t my cup of tea. Then I separate them into categories so that I can have a picture of how much and where I spent my money.
But if you don’t keep track of such expenses, your “leakage” can be quite high. By “leakage” I mean money that you have spent, but didn’t know where you spent it. Most financial planner and or financial advisor estimate that these type of leakage can be as high as 15 to 25 % of your total budget. I don’t have statistics to back up what I mentioned here but to estimate your own leakage, do this. Total up the expenses that you do know (expenses that can be tracked like loans, phone bills, bigger purchases), then add the addition in your savings or checking account. Take your income and minus the above, the figure you get is the leakage.
Example:
Total Expenses you know of = 2,500
Bank Balance (previous month) = 20,000
Current Bank Balance = 22,000
Income = 5,000
Your leakage = 5,000 - (2,500 + 2,000) = 500
Percentage wise, you leakage is 10% of your income.
After I’ve gotten my first pda several years ago, I now keep track using a expense tracking software. I’ll update my expenses 2 to 3 times a day whenever I have some free time like waiting for someone or even stuck at the traffic lights. There are many type of such software and most will synchronize with your computer. The one I’ve been using for many years now is called ExpensePlus from WalletWare . Once I synchronize with my computer at home, it even generates spreadsheets in Excel. Both for personal expenses and business expenses.
Since using a pda plus expense tracking software, I find it so easy. Sub totals of different categories of expenses are generated and I find doing my business expenditure is so much simpler. Like I said, there are many types of software available. I don’t have an interest in the company that produces ExpensePlus. By the way, I just use their demo software which is free and it limits you to do 2 expense reports. Which is good enough for me.
I’d like to hear from the readers, what methods you use that has worked for you. In case you don’t have a pda, what do you use to simplify this rather tedious process of tracking expenses.
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