When it comes to managing personal finances, staying on top of your monthly expenses is crucial. By understanding where your money goes each month, you can make better financial decisions and work towards achieving your financial goals. To help you in this process, we have compiled a list of the top 10 things to track every month.
1. Income: Start by tracking all sources of income for the month, including salaries, freelance work, side hustles, or investment returns. Knowing how much money is coming in will give you a clear picture of what you have available for spending and saving.
2. Fixed Expenses: Make a list of all your fixed expenses like rent or mortgage payments, utilities (electricity, water), insurance premiums (healthcare, car), subscriptions (Netflix), and loan repayments. These expenses remain constant each month and are essential for planning your budget.
3. Variable Expenses: Track your variable expenses such as groceries, dining out, transportation costs (fuel or public transport fares), entertainment (movies or concerts), clothing purchases or any other discretionary spending. It’s important to keep an eye on these expenses as they tend to fluctuate from one month to another.
4. Debt Payments: If you have any outstanding debts like credit card bills or student loans, ensure that you track the amount paid towards their repayment each month separately. This will help monitor progress in reducing debt over time.
5. Savings Contributions: Saving money is crucial for future financial security. Monitor how much you contribute towards different savings goals such as emergency funds or retirement accounts every month.
6. Investment Performance: Keep tabs on the performance of your investments if you have a portfolio consisting of stocks, bonds or mutual funds. Tracking this regularly allows you to evaluate if adjustments need to be made based on market trends.
7.Net Worth Changes: Calculate your net worth at the end of each month by subtracting liabilities from assets – this includes everything from cash savings to investments and property. Tracking your net worth can help you gauge progress towards long-term financial goals.
8. Tax Obligations: If you are self-employed or have other taxable income, keep track of the amount owed in taxes each month to ensure you’re setting aside enough money for tax payments later.
9. Charitable Contributions: Many people like to donate to causes they care about regularly. Keeping a record of your charitable contributions allows you to stay organized and potentially claim tax deductions if applicable.
10. Financial Goals Progress: Lastly, review your progress towards achieving financial goals such as saving for a down payment on a home or paying off specific debts. This helps maintain focus and motivation throughout the year.
By tracking these ten key aspects of your finances every month, you’ll gain valuable insight into how well you manage your money and where improvements can be made. With this information at hand, it becomes easier to make adjustments that align with your long-term financial objectives and build a solid foundation for financial success.