Taking control of your budget and financial future means first understanding what you spend your money on.
Tracking your income and spending
There are several great online tools for tracking your income and spending. Most banks and credit card companies have tools that show what merchants or categories you spend most of your money on. Unless you only use one bank and their debit card, or only one credit card, then you will only get a fragmented view of what you spend money on.
A popular online site that tracks spending across bank accounts and credit cards is http://www.mint.com. You input your bank account information and credit card information, home mortgage and car loan, etc., and it will help you track and automatically categorize spending to assist you in tracking your spending. You will quickly be able to see how much you spend eating out, shopping for clothes, or paying fines or late fees. Mint.com also creates colorful and easy to understand graphs to show your spending habits.
Once you are able to understand your spending habits, you'll be able to see what needs to change. Is eating out taking up the majority of your spending? Are you paying too much in interest charges and fines? From here, we have a great starting point for setting up a budget and understanding what spending habits need to be stopped or curtailed.
Budgeting
Creating a realistic budget involves three major factors:
- Understanding your current money management behavior.
- Knowing your financial priorities.
- Setting financial goals.
Through Mint.com, you can get a good picture of how and where you spend your money. In the following articles, we will explore setting your financial goals and understanding your financial priorities.
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Have any comments or more tips? Leave them in the comment box or email Robert directly at robert@leeharaguchi.com
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