By: Stephanie Cláudia Gonçalves
Financial stress is a killjoy. It puts you in a whole mood, ruins your sleep and creates anxiety. The most common effect of financial stress is anxiety and depression, which usually go hand-in-hand. If you are constantly stressed about your finances, then here’s how daily tracking can help you regain control of your money and improve your overall mental health.
- Discover bad spending habits 🙈
What is draining your wallet?
Maybe it is ordering take-out or buying things on impulse? Or maybe it is your expensive cable bill.
Are you really watching all of those 300 channels on television?
The only way to find out why you are running out of money every month is to track your expense on a daily basis. A great way to start this is to list out five major expenses that you have on a daily basis and how to do these change depending on certain days/events. Daily tracking can help you understand which months or specific seasons do you tend to spend more. This also helps reveals bad spending habits.
2. Combat hidden expenses 👊
Daily tracking also helps to identify hidden expenses. Are you still being billed for a two-year-old subscription that you no longer use? You will never know until you start tracking your expenses on the go.
3. Prioritize Spending Better 💸
Daily tracking helps you figure out where all of your money is going. This not only allows you to prioritize your spending but also enables you to cover essential expenses, such as bills, debt, or tuition fees first.
4. Work Better With Budgets ⛑
While budgeting is noted as one of the best ways to turn into a disciplined saver, most people struggle to stick to a budget or end up creating far too many, which, in either way, is extremely stressful.
Once you understand where your money is being spent, you can create tailored budgets for trouble areas and make better plans to respond to any red flags that might cause you to overspend.
5. Daily Tracking vs Budgeting — The Ultimate Winner 👏
Tracking your expenses in itself is considered to be a much better approach to saving than budgeting. First of all, it is easier to start. All you need to do is note down your expenses on a paper or an app. You will start to notice which areas you are overspending on and this will encourage you to make a change.
Daily tracking is less stressful to maintain and most importantly, it will stop you from committing to a fixed level of spending.
6. Stay Out of Debt 😌
While student debt has always been a cause of stress for millennials, credit card debt has now topped the list becoming the biggest financial source of stress for 27% of millennials., while 25% believe that it is student debt. Daily tracking may help you get out of debt by helping you understand how much you need to set and give you peace of mind.
7. Meet Your Financial Goals 🥅
Are you aware of your financial situation?
Do you know where all of your money is going?
If you are unsure about these questions, it’s time to start tracking your expenses. Tracking will allow you to figure out the most efficient ways to save money to meet your goals.
Let’s take an example. Your goal is to pay off your student debt as soon as possible. To do this, every month you should save up $500 that will be allocated towards repaying the debt. This amount is either the minimum requirement or you can save a little more to pay off the debt faster. How do you save a little more? Track your expenses and figure out what areas you can cut back.
8. Build An Emergency Fund 👌
You should always have some money saved up for a rainy day. This money should cover between 3 to 9 months of your living expenses if a financial emergency ever hits you. The fund should also help you out in unexpected situations that may affect your mental health or career growth. Quitting a toxic job despite not having another job lined up is one example.
Is your budget too small? Fear not, it’s still possible to save up for an emergency fund. Through daily tracking, you can free up some extra savings (even if it is only ten dollars) and aim to save up enough for one month. Then you can build up from there.
That’s all great, but is tracking every day worth it?
The simple answer? Yes.
With money, a day can be as long as a decade. The only way to factor-in and be mindful of your finances is to create a simple, effective, and hassle-free system to manage your finances. Know your “now” with money in order to build a better tomorrow.