Track Your Financial Success

January 18, 2017 by Jason Smith

If you want complete control over your finances you are going to have to start tracking your money.

Tracking your finances is not just about tracking your spending. Tracking should also about tracking your progress. This tracking does not have to be difficult.

Tracking where your money goes will open your eyes to how much you are really spending things. Most likely there will be some surprises after just a few months of tracking. After a year there could be out right shock.

Tracking your expense cuts out the excuses and makes you face the reality. If you add up your receipts and you find that you spend $2,000 to $3,000 a year on eating out. You may want to rethink how much you spend on this category.

As your progress and accomplishments build so will your confidence that the commitments, effort, and sacrifices will pay off.

To control your money you need to know where your money goes.

In order to know what you can do with your money and how you can make the most of it, you need to know what you are spending it on and how much you are spending. By going through this process, you will determine how to get to where you want to be in life in terms of your money. Though everyone wants to make the most of their money to become financially independent, most people will never go through this step we are about to do. This step involves tracking all of your expenses so that you know exactly where your money goes.

Track Your Spending

When my wife and I first started tracking our finances we used paper and we later switched to Quickbooks since she had experience with it as a CPAS. You can have it much easier than either of these options.

We switched to Mint.com at the beginning of 2015 and still laugh at how much easier it is. I am not affiliated with Mint.com and am sure it is not the only option. Mint is just the option we went and can say it is much better the paper or desktop softer.

Action Habits

Get started with Mint.com or another financial software that automates as much as possible.

Track Your Progress (Net Worth)

When it comes to progress we now only track one thing, our net worth. Maybe two, if you have debt I would strongly suggest tracking this too.

Tracking your Net Worth a few times a year only takes a few minutes, maybe an hour a year. Yet it can be incredibly rewarding each time as you see the progress.

Take advantage of your accomplishments. Use them as leverage to continue forward. Use them as encouragement when things may not be going as well as you hope.

Laurie and I update our net worth, retirement, and college savings amount about twice a year and post it in our closet where we see it a few times a day.

How to calculate your Net Worth?

Action Habits

Spending: Keep a receipt for everything you spend and track the receipts.

Track Your Net Worth Progress: At least once a year calculate your net worth and any values of interest, retirement, college funds, etc.

Track Your Debt Progress: If you have debt, add up the total debt you owe and the total paid each quarter celebrate the decrease.