2 Benefits of following your Expenses

While creating a budget is important, there is another even more important thing when it comes to your finances. The budget is not any good unless you also carry a cost control.

To keep a control on your personal expenses, you can use a format for cost control in Excel. Although the numbers and spreadsheets may make us turn the head, it is necessary for the purpose of tracking your expenses. There are certainly hundreds of ways to do this and yes, you will have to do a little math too.

But instead of focusing on how to follow your expenses, let us talk about why you should follow your expenses. If you are willing and ready to recognize the benefits of following your expenses, you are more likely to do the same. Here are two benefits of cost control that will motivate you to make a start.

A significant budget

In order to create a meaningful budget, you need to understand a bit where your money goes. Certainly we know the fixed costs, those who do not usually fluctuate too, such as rent or mortgage, but what about the grocery bill or petrol for your car?

Many areas of your budget may fluctuate on a weekly, monthly or yearly basis. If you only look at the last grocery bill, you may overlook the fact that you bought some extra food while visiting friend or you spend less on food items because you spent a few days away from your home.

If you do not have to fill petrol this week, you may forget to include that in your budget. It is important to monitor and control domestic spending over a longer term in order to build a better budget. And when a good budget is generated, it is more likely that you adhere to it.

Keeping track of your spending for some time before the creation of your budget is better. It means you will have an excellent starting point for your spending plan. With that, you would know where your money goes and from there you can decide what changes you need to do in your budget.

Cut senseless expenses

Having a budget is important. But, that is not enough. If you’re spending away from a plan, you’ll find yourself in a tight spot every month. On the other hand, if you have a monitoring and cost control method, even without a budget, you may discover some shocking numbers.