Monitoring Expenses in the New Year

Posted by: Sophie H. | Dec 28,2007


I’ve been writing about resolutions this week – what are the odds!  The end of the year is the perfect time to gauge where you are financially for the following year.  At the same time, it really helps if you have a paper trail available from the previous year.  

You can look at your bank account to determine how much money was paid out the previous year, but this is a pretty general look at your finances.  You really need to get a sense of your day to day spending.  Do you honestly remember every little item you bought throughout the year?  Of course you don’t, unless you’ve got the memory of Superman.  

I’m not advocating saving every receipt for the year because that can become pretty cumbersome pretty quick.  I would recommend using a software program like Quicken or Excel to manage your finances.  If you haven’t already, write down every single expenditure in a typical month to determine just how much you spend monthly for the year.  For retirement planning, determine if this typical month is also typical for retirement.  Some expenses will fall by the wayside, while there may need to be some extra expenses as well.    

If you’ve been less than responsible with monthly budgeting, now is the time to start anew.  You’ve got a blank slate.  You may be surprised by the results.  Suppose you bring in $50,000 and find that you’re paying out $60,000 every year.  Your credit card bill is a pretty good gauge of your overall debt picture, but you shouldn’t only rely on a credit card or bank statement.  Budgeting should be done on an expense by expense basis.  

Sponsored Resources Ads by Google