Level 3: Tracking My Expenses

Level 3: Track Your Expenses

The What, When, Who, How and Why of tracking your expensesThis post describes how I started tracking my expenses and what tricks I used. If you’d like to read more about the task itself, have a look at Step 3: Track your Expenses where I describe the procedure in more detail.

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After making some initial progress towards Financial Independence and after having remained on level 2 of the process for a while trying to identify my goals of this mission, I am ready to move on to the next level of this journey: starting the third step and registering all of my expenses.

I know that having a list of all my expenses will be an invaluable resource during many stages of this mission, as many of the steps will rely on a detailed insight of what comes in and what goes out every month, so I am totally committed to start keeping track of everything that happens with my money.

The infographic on the right tells you more about which factors to consider when registering your expenses.

What

I’ll be registering all my cash, credit card, debit card, transfers, standing orders and other payments from my checkings and savings accounts as well as any payments from the joints accounts I have with my husband.

When 

I am going to try to register any expenses in the moment as much as possible, but of course I know there will be times I’ll forget and I have certain payments automated, so I’ve decided to take 5 minutes at the end of each day to check I’ve registered everything, by looking through my wallet for receipts and logging into my checkings accounts. My savings account I’ll check just once a week as I know that currently only has 2 movements a month: when I get my interest and when my automatic transfer gets in. In this way I know I am least likely to miss out on any. I have a reminder in my bullet journey to make sure I do this every evening.

Who

My husband is sooo not going to register his expenses so I know there’s no point insisting. He has his own individual accounts that he is of course responsible for so I won’t get involved in that or ask him to track his expenses, but for our joint accounts I will keep track of things. Where possible I’ll ask him to pass on receipts but I’ll probably just log into our account daily to check what’s happened and to ask him in the moment if I need to know more about a particular expense.

How

I have tried different options to log my expenses and I have in the end decided to go for YNAB – short for You Need A Budget. I love it as it is a relatively easy to use programme and it also has several more advanced features that you can decide to start looking into more once you get the hang of the programme. YNAB can be used both online on your computer as well as by downloading its app and that for me is a key necessity as I’d like to be able to insert expenses both on to go in the moment as well as when I am sat at my desk.

Of course if you’d rather stick with paper and pen option that is no problem either and the advantage there is of course that you don’t need any type of technology to keep up your new habit.

Other alternatives include using a digital programme such as Microsoft Excel or Mac’s Numbers to track your money as well as other apps widely available – just search for them and see which one you like best.

Why
My own main why is that I want to gain insight into my spending pattern so I can identify where I can save money in order to boost my savings for long-term goals I have, the most obvious one being reaching Financial Independence of course.

These are my own 5 key strategies to tracking my expenses. If you aren’t already tracking your own expenses, make sure to start today and read up about it in the detailed explanation in step 3: Track Your Expenses.

Day 31 / 31 Set Goals and Visualize your Dreams

Day 31: Set Goals and Visualize your Dreams
Day 31: Set Goals and Visualize your Dreams
Day 31: Set Goals and Visualize your Dreams

Congratulations!! You’ve made it to the last day of the 31 Day Challenge to Financial Excellence! Some days might have been easier and others more difficult, but you held on and continued until the end. That’s a good sign as it not only means that you’ve probably made some huge progress in many of your financial areas, it also indicates that you are much more likely to appreciate the progress you’ve made and to keep up giving financial planning a prominent place in your life.

And that is also the very last challenge of this series: to set goals and to visualize your dreams in order to keep moving forward even now you’ve come to an end of the 31 Days. Continue reading “Day 31 / 31 Set Goals and Visualize your Dreams”

Day 30 / 31 Your Children & Finances

Day 30: Your Children and Finances
Day 30: Your Children and Finances
Day 30: Your Children and Finances

Whether you have children on your own, grandchildren or (adopted) nieces and nephews or plan to have children at some point in the future, you can play an important role in educating these children financially, especially taking into consideration how little most schools incorporate personal finance into their curriculum.

Save money for your children

The first thing to do, is to set aside some money in a savings or investment account (again it doesn’t matter how much or little) so you can start growing some money for your children. Not only will this once they are a little older give you a great topic to discuss with them to show them the power of compound interest, it also makes for a great 18th, 21st or wedding gift. Continue reading “Day 30 / 31 Your Children & Finances”

Day 29 / 31 Give to Charity

Day 29Day 29 of the day Challenge to Financial Excellence
Day 29: Give to Charity

I think we all appreciate that we “should” give to charity and help improve the lives of others and make this world a better place.

Giving to charity does not have to cost you hundreds of dollars a year. It is just like saving money: start with it early, even if you can only contribute $1 a month, or $10 a year. Not only is that still $10 a year, it also gets you into the habit of giving, so that every time you have a little more money available, it will be easy to also increase that contribution, even if it is by just a small amount, to make space for it in your budget and to remember that there are so many who are less fortunate than you and to whom your (however small) contribution can make a considerable difference. Continue reading “Day 29 / 31 Give to Charity”

Day 28 / 31 Celebrate your Victories

Day 28: Celebrate your Victories
Day 28: Celebrate your Victories
Day 28: Celebrate your Victories

During the past few weeks and in the next weeks, months and indeed years, you hopefully will have and will continue to set new financial goals. Setting goals is one thing, but achieving them is a whole different matter. Goals are usually easy to set and difficult to achieve and require real commitment and dedication. As you continue on your journey to financial excellence, your goals might become bigger and more abstract which in turn makes it more difficult to see your daily efforts paying off.

You can make goals more tangible by not focussing on the end goal but on smaller milestones along the way, making it easier to see progress.. Then – and here is the most important part – you should celebrate your victories. Once you have got together half, a quarter or even just 10% of your $10,000 savings goal – celebrate. Continue reading “Day 28 / 31 Celebrate your Victories”

Day 27 / 31 Organize your Administration

Day 27: Organize your Administration
Day 27: Organize your Administration
Day 27: Organize your Administration

Now that you have almost got to the end stage of the 31 Day Challenge to financial excellence and have hopefully made huge progress on various areas of your financial life, one of the worst things is to have your finances all in order and then not being able to find important financial documents when you need them, such as insurance policies, warranties, bank statements or income stubs for your tax return. 

Having a proper, up-to-date and easy to understand filing system, does not only guarantee less stress and time lost when you are looking for things, it also ensures you do not waste money for example on a new product if your old one still has a guarantee on it. It allows you to quickly check you still have the right insurance, update your assets, debts and cash flow and makes is easy to check your credit card statements are all correct. Continue reading “Day 27 / 31 Organize your Administration”

Day 26 / 31 Update your Estate Plan

Day 26: Update your Estate Plan
Day 26: Update your Estate Plan
Day 26: Update your Estate Plan

Today’s challenge may not be the most cheerful of the ones to busy yourself with, but estate planning should be high up on your priority list of financial planning, no matter how old or young you are.

Estate planning is about taking the necessary steps now to arrange for what will happen to your inheritance for when you pass away as well as making arrangements for who is to make key decisions in case you no longer can.

There are 6 key parts you should arrange as part of your estate planning, which include: Continue reading “Day 26 / 31 Update your Estate Plan”

Day 25 / 31 Audit your Insurance

Day 25: Check your Insurance
Day 25: Check your Insurance
Day 25: Check your Insurance

Risk management and insurance is an important part of financial planning, although surprisingly often overlooked. Many feel insurance is boring, complicated or not needed and years of careful financial planning amounts to nothing if a small oversight on your side leads to a financial disaster for you or your family.

Choosing which types of insurance you need, which ones you do not and making sure that the ones you have are still up-to-date and applicable to your current situation can be a bit of challenge though, which is exactly why it is our challenge for today! 

An insurance is essentially a financial protection you contract against the risks of a possible loss. Below are the 5 most common types of insurance you might need: Continue reading “Day 25 / 31 Audit your Insurance”

Day 24 / 31 Investing Concepts

Day 24: Investing Concepts
Day 24: Investing Concepts
Day 24: Investing Concepts

Before moving on to the next financial area, let’s finish off with three key investing concepts.

Bull & Bear Markets

We speak of a bull market when share prices go up over a period of time, leading to more market activity and people wanting to buy more, thereby driving up the prices further. The opposite of a bull market is a bear market, during which prices generally go down, with many investors often wanting to offload their shares to avoid any further losses. Continue reading “Day 24 / 31 Investing Concepts”

Day 23 / 31 Should you Invest?

Day 23: Should you Invest?
Day 23: Should you Invest?
Day 23: Should you Invest?

Now that we have covered the basics of investing and the stock market, you might still be wondering whether investing is the right move for you. This challenge starts with looking at reasons to invest, followed by some reasons to hold off investing, after which you should be able to make a more informed decision.

Why should you invest?

Let’s start with some of the main reasons that makes investing worthwhile to many.

  • Investing is an alternative to saving: by setting money aside people hope to grow it and with time build up a nice small capital. 
  • Over long periods of time, the stock market generally goes up. Even if there is the occasional crash when stock prices go down, if you have the time and the patience to sit it out and wait, the market will recover again.
  • On average the markets go up by somewhere between 7-10% yearly. That is more than most yearly inflation rates;
  • The market average is also normally higher than interest rates offered on saving accounts;
  • Another fun advantage of investing: many people like to track their shares and see how they are doing with their investments.

Continue reading “Day 23 / 31 Should you Invest?”