We often strain our finances due to discretionary spending during celebrations. In such situations, financial budgets go awry, and savings take a backseat, leading to a cycle of financial strain.
In this edition, let’s plan ahead and explore how to track expenses intentionally, taking control of our finances. Here are practical ways to mindfully track your expenses:
Categorising Your Expenses
Start by categorising your expenses under various headings like rent, groceries, clothing, maintenance, overheads, and gifting. This categorisation unveils spending patterns and highlights areas for potential cost reduction. Deep dive into your current financial standing through effective expense categorisation.
Interesting Fact: A Max Life Insurance study in 2023 revealed that 90% of people above 50 regretted not investing earlier for retirement, with 40% of urban Indians yet to plan for it.
Differentiating Between Needs and Wants
Distinguish between needs and wants to gain clarity on essential expenses versus discretionary purchases. This helps in mindful spending, ensuring that each expense aligns with your financial goals.
Track at the Moment
After categorisation, adopt the habit of tracking expenses instantly. This ensures that even small expenses are recorded accurately, providing a clear overview of your inflow and outflow. Intentional expense tracking helps in curbing discretionary spending and redirecting income towards savings and investments.
Automate the Process
Once you have mastered categorising and tracking, gradually automate the process. Utilise apps to simplify expense management. Automation reduces manual intervention, making financial tracking more efficient over time.
The key is to start by giving considerable time and resources to this exercise for your financial betterment. But as you start to get hold of it, the process can be automated.
Here’s a simple expense tracker that you can make:
Incorporating Mindfulness Techniques
Beyond the basics, consider mindful techniques for financial well-being:
a) Apps for Financial Goals
Explore apps that align with your financial goals. There are apps that track daily expenses and suggest investing the spare, fostering consistent investment.
b) Budget-Friendly Challenges
Engage in challenges like a ‘no-spend weekend’ or a month without dining out to boost savings. These challenges not only save money but also promote a healthier lifestyle.
c) Mindful Spending Tips
Adopt daily practices to cut expenses, such as bulk grocery shopping mid-week for discounts. Small changes, like walking instead of driving, can lead to long-term savings and better health.
Remember, understanding where your money goes is essential for effective management. The steps discussed are simple yet powerful when consistently applied. Embrace these practices to enhance your financial life and be better prepared for a fulfilling 2024!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
