The decision to manage your debt is one that requires courage, dedication, and the determination to regularly track your expenses. If you’re not accustomed to living your life in an organized fashion then now is the time to make the changes necessary to essentially manage your debt and clean it up once and for all.
Why It’s Important to Track Your Expenses
You may be wondering why it’s so important to track your expenses when you’re trying to manage your debt. The answer is pretty simple. If you don’t know how much you’re bringing in and how much you’re spending, how can you ever manage it? Those who never pay attention to how much an item costs, and never make plans to decide where their money should be spent, often waste it on frivolous items, while important bills are overlooked. This can result in the creation of debt from bills owed to credit card companies, utilities, and even the IRS.
Learning How to Track Your Expenses
In order to get a grip on your debt management, it’s a good idea to learn how to track your expenses. One of the easier ways to go about doing so is to create a chart. On the chart, you can list your weekly expenses by creating a row of categories with the following titles: date, purchased from, description, and dollar amount. Underneath each category you can utilize columns to list the date of purchase, where you bought the item from (restaurant, vending machine, clothing store), what the item is (lunch, candy bar, t-shirt and jeans), and how much the item(s) cost.
Feeling overwhelmed yet? While it’s a process that takes some getting used to, it’s not only recommended, but necessary for getting a grip on your finances. By looking over all of the items you’ve purchased during the week, you can determine what you’re wasting money on and how you can begin to spend more responsibly.
So if feel that you need to manage your debt in order to clean up your credit report and create a better process for managing your finances, don’t waste another minute. By making sure to track your expenses each week, you’ll see immediate changes in where your money is routed, which will give you room to pay your creditors the debts you owe them.