The Power of Tracking Your Expenses

Over the weekend I took up a project on myself. It was to track all of my expenses going out of my salary account since last financial year.

I tracked each and every transaction. Categorized them into various expense heads such as - Rent, Cabs, Food, Groceries, Shopping, Cash Withdrawals, and Credit Card Payments. Broadly covering expenditures on my lifestyle needs and superfluous wants.

With over 2000 transactions analyzed, I gained a clear picture of my spending habits.

However, this exercise isn't new to me; I've been doing it every 3 to 6 months for years. I recommend everyone I help with finances to do this as a very first exercise.

This helps you become aware of where your money is going. And this awareness seeps into better financial decisions, right spending habits, and eventually less overwhelming money thoughts.

Because if something can't be measured, it can't be managed.

This simple practice of tracking creates the foundation for all good financial habits. You can't optimize what you don't understand.