Have you ever wondered, after you have spent your weekly or monthly income, just where the money went? Are you spending more on certain items than you really want to? Are you spending more on the same item now than before, and is this because of inflation or some other reason? To get the answers you will find it most helpful to have some form of home bookkeeping.
Many persons shudder at the thought of keeping records. They may feel it is too time consuming or too difficult. But this need not be the case. Furthermore, home bookkeeping does not require keeping track of every cent you spend.
Actually there are various systems for keeping track of expenses. And you can select the system that suits you best. Whatever system is used, there are three main steps in setting it up:
(1) Classifying your expenses under main headings;
(2) keeping a record of what you spend under these headings and
(3) summarizing the expenses monthly.
Having obtained your expenses for the month under the main headings, the next step is to summarize these expenses at the end of the month. The purpose in making this monthly summary is for the review of the trend of your expenses. This will enable you to make any adjustments if you observe any undesirable trends creeping in. This will help you in planning how to spend your income and thus gain the optimum use of your money.
So you do not keep track of your expenses for the sake of keeping records. The recording of expenses alone means nothing. To be of real value, the results must be used to compare expenses in other periods. Then you can determine trends and make adjustments as circumstances warrant. Or the results may be used in connection with a budget or plan, comparing one with the other. If you take action to correct matters whenever undesirable trends begin to show themselves, then this will help you to live more in harmony with your life’s goals.
