How to track spending and manage a personal budget
Tracking spending helps identify patterns in how money is spent, plan bill payments, manage debt, achieve savings goals and gain better control over finances, ABC News Australia reports. National Debt Helpline coordinator Viki Staff emphasizes that keeping records provides clarity about spending, after which financial decisions can be made.
According to her, monitoring spending is especially important for people who struggle to pay for basic needs. Payment data can help prepare for negotiations on an arrangement in the event of financial hardship with a mortgage lender or electricity provider.
Where to start keeping records
The Moneysmart service of the Australian Securities and Investments Commission advises reviewing bank statements and transactions in apps for several months before starting daily record-keeping. This makes it possible to spot regular and irregular expenses, including quarterly and annual bills, unfamiliar charges and subscriptions a person does not use.
Transactions are recommended to be divided into categories, such as food, transport and health. Chartered accountant and financial educator Ketvi Rupnarain advises not to complicate the process. For a couple that has not previously tracked spending or followed a budget, a specific goal — such as a trip abroad — can become motivation.
More current news is available on the UA.News Telegram channel Telegram.
Spreadsheet, app or notebook
Darwin public servant Mia Sandgren began keeping records after getting her first full-time job. She now updates a spreadsheet every month with expected annual expenses and compares actual spending with planned spending.
Her spreadsheet includes categories for necessary, important, discretionary, emergency and undesirable expenses, including fines. Sandgren classifies yoga as an important expense, while restaurant visits and holidays are discretionary. According to her, manually updating the spreadsheet helps assess whether particular expenses were worth the money spent.
Staff notes that there is no universal way to keep records: people can use spreadsheets, bank tools for categorizing transactions, dedicated apps, a notebook or notes on a phone. She advises checking the bank's free tools, while Rupnarain recommends choosing the method that will be most convenient to use regularly.
