It depends on its classification and making the necessary adjustments to achieve financial stability

5 ways to track your monthly expenses

Create a budget that alerts the individual if he is about to exceed it, with the possibility of adjusting it in accordance with his needs.

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Track spending on a regular basis, which paints an accurate picture of individuals on the destination of their money to be in the optimal place within the financial plans set in the framework of achieving the goals that they aspire to, according to the "Nerdwalt" organization specialized in financial consulting, which has identified five ways to track expenses through its classification and the adoption of a budget Financial and making necessary adjustments to achieve financial stability.

Nerdwalt explained that the five methods are as follows:

Account inventory

Financial habits should be determined through an inventory of all accounts, including the checking account and all credit cards, which helps determine the categories and nature of spending.

Nerdwalt quoted Annamaria Lusardi, head of the economics and accounting department at George Washington University’s School of Business, who advised her to know the monthly cash flow, meaning regular income and expenses.

According to Al-Losardi, the current payment methods and periodic data through cards provide enough information that an individual needs to get to know more about his financial lifestyle, and to set accordingly a budget that derives its effectiveness from the accuracy of the data available to draw requirements during the new month.

Classification of expenses

Nerdwalt emphasized that the classification of expenditures must begin, as some credit cards allow automatically to mark purchases in specific categories such as stores or cars, indicating that the individual may realize that he is paying for services that can be dispensed with.

She explained that the spending consists of both fixed expenses and variable expenses, pointing out that it is unlikely that fixed expenses will change from month to month, and they include mortgage or rent, utilities, insurance, debt payments, and others.

However, "Nerdwalt" added that the individual will have more space to control variable expenditures such as food, clothes and travel, and categories of expenditures can be created, and thus the individual will reach a position that qualifies him to control his financial affairs and manage money, indicating that this means at a later stage allocating money for savings Or the money that goes to the emergency fund.

Budget application

Nerdwalt pointed out that budget applications such as "Mint" and "You Need a Budget" are designed to manage money according to several characteristics, which allows the client to allocate a certain amount of disposable income each month depending on what he gets and what he pays. This will help. Applications record purchases, time and budget commitment, and applications automatically categorize associated credit and debit card transactions.

She said that the creation of a budget alerts the individual if he is about to exceed it, or he can amend it in accordance with the needs, in addition to scheduling payments and their due dates, noting that the applications allow a comprehensive review of financial requirements, the possibility of comparing them with previous periods or preparing for future expenditures.

Data tables

"Nerdwalt" stated that spreadsheets are another valuable tool for tracking money, pointing out that you can find a variety of free budget templates online, which gives flexibility to the individual if he has a more complex financial portfolio, as it is possible to monitor banking transactions and investments, A financial plan can be developed in the traditional way using only paper and pen, or you can save time and effort by using digital tables to calculate the required amounts and determine expenses, using a simple and customizable template on an Excel spreadsheet.

Make adjustments

Nerdwalt stressed that during the tracking, the individual must be prepared to make adjustments.

She pointed out that Assistant Professor of Personal Finance at the University of Arizona, Richard Slerin, said that reducing "large fixed expenses", such as the cost of housing, vehicles and utilities, could have a significant impact on the budget, explaining that the task is not only to monitor spending, but rather is represented. In making decisions and constantly reviewing the budget by directing funds to more important categories.

The 5 methods

■ account inventory.

■ Classification of expenses.

■ budget application.

■ data tables.

■ Make adjustments.

Important considerations before obtaining credit facilities

Taking the appropriate decision regarding obtaining bank loans involves several considerations, as financial products such as personal finance, real estate or others, have a significant and important impact on the financial situation of the individual over many years, and they should also be commensurate with the needs and capabilities of the customer, according to financial institutions, Among them is «Credit.org» which recommended at the outset and before making any decision, the importance of setting a clear and precise goal for the purpose of obtaining financing, and knowing whether it will improve the financial situation of the individual or contribute to increasing his assets, with the need to ensure that all funds are used in the best way. By moving away from covering the costs of consumer expenditures.

The Foundation stressed the need to request the amount that corresponds to the needs and requirements specified in advance, and not to exaggerate the request for more for people who qualify for larger amounts, explaining that the monthly income is usually calculated based on the total monthly salary, investment returns or other income channels. Here, the customer should be aware of the percentage of his bearing of the monthly obligations, which measures the rate of the monthly credit obligations of the customer to his total monthly income, as the periodic obligations that the customer must pay monthly without neglecting other expenses.

The Corporation indicated that credit facilities have costs related to fees for loans and interest rates, pointing to the importance of calculating the total amount when requesting financial facilities, i.e. the total cost of the loan to the customer and the total amount that he will pay to the lender at the end of each month.

She pointed out that the effects on loans extend for a long period of time and have major implications, especially for credit evaluation, as failure to pay obligations will negatively affect the client's evaluation, which affects his creditworthiness.

• Spending consists of fixed expenses and variable expenses.

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