Credit to Author: JOSH MASCARIÑAS| Date: Wed, 05 Jun 2019 16:16:03 +0000
Have you ever thought of auditing your finances? If yes, what do you feel when you look at your monthly spending? Do you feel guilty splurging your money on unnecessary purchases? These questions may bug you as you struggle to make ends meet. Yes, your salary is just enough to pay your rent, utilities, and daily needs. But what about your savings? Are you regularly saving money?
What if you aren’t? You may just then resort to borrowing money when bad financial circumstances arise.
Want all these questions to not bother you so much? Auditing can lessen your problems. Here are some steps to follow when doing so.
Evaluate your buying behavior
Evaluating your buying behavior can help kickstart your auditing task. Take a look at your financial habits to check the reasons why you overspend or underspend. If you think you’ll go straight to plain auditing your expenses, you’re wrong. You have to ask yourself these questions first: “What is my attitude toward spending?” “Am I more of a saver or a spender?” These will give you an overview as to why you have to audit your finances.
Review your spending
An audit is a full examination of every financial aspect in your life. To review your spending, you have to collect every financial document, bill, receipt, statement, or any other relevant document you can find. These records can help you better understand where your income is going.
It’s important to review your money habits to know the things you are spending on. If you don’t keep your receipts, at least take note of every purchase you’ve done. Everything you buy should be religiously documented on your notes or in an online file. Every item should have their corresponding prices as well.
Categorize your expenses
After reviewing your expenses, you have to ask yourself whether every item you purchased is essential or not. Simply group your expenses according to these two categories. This is an imperative part of auditing because it allows you to eliminate or lessen your purchases in the future.
It’s best to refine your expenses so that the next time you’re going to a supermarket, for example, you already know what to buy. Because when you’re outside, your buying behavior matters. You should know what unimportant items to avoid. You need to categorize your expenses to curb impulse spending.
Determine your spending routine
Apart from the purchases that need to be reviewed and categorized, you have to check your spending routine. Assess your transportation costs when going to work and other places you often visit.
If transportation eats up a chunk of your salary, then you should think of other means of transportation that will help you save money. Auditing your spending routine helps you decide on an inexpensive yet effective option.
Your other spending routines like buying coffee and snacks or eating out and attending Friday gimmicks can be controlled. If you don’t want to get rid of these splurges then at least do them occasionally. Think about this–indulging in a particular treat too often somehow ceases to be an indulgence and becomes routine and ordinary. Where’s the good in that?
These steps may be tiresome but if you want to have a full grasp on your finances, they are imperative for you. Auditing your expenses is a healthy practice toward financial transparency. Do this for yourself. Admit your financial mistakes and make up for it. Auditing will point out areas in which you have failed. However, it’s in your hands as to how you’ll win over setbacks.
Josh Mascariñas is a content writer at Moneymax. Save money on car insurance, credit cards, and loans when you compare and apply at www.moneymax.ph! Visit their website to know more.