If you work with a financial advisor in our Perth office, one of the first things you will probably be asked to do is to figure out your monthly expenses. There is also a pretty good chance that your financial planner will advise you to create a budget.
Knowing monthly income and expenses is one of the first steps to getting a handle on your financial situation. The better you are at this, the easier it is for a financial planner to provide you with your desired results.
Why Track Spending?
Usually, when someone tracks their spending accurately, it is a true eye-opener. They usually find a lot of surprises and have no idea they were spending so much money on entertainment or any of many other things. Accurate tracking allows you to see exactly what you are spending instead of guessing based on what you want to remember.
What to Do
Spending is easily tracked on your smartphone. Both iPhone and Android have plenty of apps to help you easily and accurately track every bit of money you spend. If you don’t like any of the apps, you can create a spreadsheet or just use a piece of paper.
You can create categories for spending, creating categories for transport, rent, utilities, food, beverage, entertainment and maintenance. You can also dig deeper into categories such as water, coffee, wine and others in the category for beverages.
The Intended Result
When you know exactly where your money is going, it is usually easier to create a more realistic budget. It can also show you places where you can save money. For example, if you are spending $200 a month on your morning or afternoon cuppa, you may decide to seek an alternate solution.
Call Approved Financial Planners
Remember that we can’t provide individual advice here: you need to talk to us in our Perth office. To learn more or for an individual consult, call Approved Financial Planners today: 08 6462 0888.