How to Improve Your Finances Through Tracking

How can you expect to improve your finances if you don’t know where your money is going?

Tracking your income and expenses will show you where you really spend your money. 

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” – James W. Frick

If you truly want to see what you value in life and where you can make changes, start tracking your spending.

Note: If you like freebies and discounts, check out how to get a $100 cash bonus from ING, $15 from Up Bank or have a look at the full list of freebies, offers and discounts for every state.

Disclosure: This post may contain affiliate links to the products and services I use.

How to Track Your Money

There are multiple ways to track your money, how you do it depends on what you feel works best for you.

Apps are probably the easiest way for most people to do it, especially if you mainly pay for things with your card or bank account. WeMoney is one we’ve used and have written about.

If you use cash, you need to start collecting all the receipts because you will be surprised where your money goes.

With apps, you connect your bank account or accounts and it is all tracked if all your spending is done through your card.

You can easily see where you are spending money and what you can cut back on once you start tracking it all. 

Most of us are surprised by how much we spend in certain areas when we do a tracking exercise.

Alcohol, eating out, groceries and similar are usually much higher than people budget for or assume. 

Track Your Income and Bonuses

Expenses aren’t the only thing you need to track.

Keep a record of ALL bonus money to see how abundant your life truly is.

Cash sales for things you sell online, that dinner someone else paid for and other unexpected savings or money that comes your way. 

Tracking the money coming in will help you feel wealthier too.

If you only track your expenses, it will make you feel poor and have a scarcity mindset which is stressful. 

Money coming in makes us happy vs money going out usually hurts unless it’s for something really cool.

Most of the money going out is for boring expenses though and hard to get excited about. 

Changes to Make After Tracking Your Money

After tracking your money for a while you will have a clearer picture of your true spending and budget.

Sit down and rework it now you know the actual figures, doing it as an annual financial review like this one might help.

Go over every expense. Ask yourself how you can cut it back.

Start with the areas where you can make the biggest impact. 

For example, insurance is usually an immediate saving when you compare and find a better deal.

Refinancing the home if you are in a position to do so can save thousands in interest.

Anything you can do to get a quick boost will help with morale as well as your finances.

Things that take longer to see an impact such as cutting out the daily coffee can be harder to change.

Live Your Life

The number of times people say to cut out your daily coffee irritates us.

However, simply cutting out these little expenses isn’t enough, nor is it how most people want to live life.

Decide on the lifestyle you want. If a daily cafe coffee is part of that, that’s ok. Budget it in and enjoy it. 

Small Habit Changes to Improve Your Finances

That said, now you’ve tracked your money and can see where you are leaking, it’s time to make some small changes.

It’s not enough to simply cut things out. You need to replace those habits and make that money work for you 

Transfer the Savings

If you do cut out your daily coffee, set up an automatic transfer to send the money you were spending to your savings.

If you don’t want to cut out the daily coffee, then transfer it every time you want to buy one but don’t.

You would have found a way to live without that $4 so you could have the coffee.

By transferring it to savings, you are making that money work instead of blowing it elsewhere. 

Invest Instead

Take it one step further. Rather than just transferring the money to savings, invest it.

Save it up and buy shares or indexed funds in one lump sum when you get to $1,000.

Investing makes your money work even harder for you. 

Another option is to salary sacrifice if you aren’t already.

Once you have chosen a small habit to change, arrange for that amount to be sent to your superannuation through payroll.

It was money you were living without anyway, so make the most of it now. 

Do it From Home

Make your coffee at home for significantly less than the cafe. Pop some fakeaway in the freezer.

Indian curries such as butter chicken and rice freeze well.

Or pizza bases with your favourite toppings. Get an air fryer to make yourself chips (or just do it in the oven).

Everyone knows these options work out cheaper than buying them at cafes and restaurants.

With a little prep work, you can resist takeaway when you are super tired.

Teach Your Kids

Get your kids to do things around the home.

For example, teach them to cook. You can use meal kits as they are easy to follow and essentially fail proof.
Everyplate offers easy meals from $2.19 per plate with this discount. 

Alternate and mix it up or use one after the other to maximise the discounts for you. HelloFresh offers up to $200 off, spread across your first 6 boxes for new and returning customers. Conditions apply.

45% off your first box with Marley Spoon and further discounts.

Up to $140 off Dinnerly, spread across your first few boxes.

Doing this makes it so much easier.

This means we are less likely to get takeaway or junk on the way home. 

Also teach them to do things around the house to free up more of your time, give them life skills and reduce your stress. Check out 11 life skills I want my kids to have. 

Your Money, Your Choice

One of the sayings in our house is “My body, my choice.” This applies to money as well. How you spend your money is up to you.

Tracking it will absolutely help you get on top of it all and improve your finances. 

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