Tracking Spending - PowerPoint Presentation

Slide1

Tracking SpendingSlide2

Why Track Spending?

Provides an objective view of your finances

Helps you live within your incomeEnables you to chart your financial futureSlide3

Receipt Method

Get a receipt for all expenditures

If you don’t have one, create one by writing the amount spent, for what, and to whomLabel the receipts by expense categories from your spending plan

Regularly record amounts and compare them with the planned amounts in spending plan For this method to work, all family members must follow this procedure Slide4

Advantages of Receipt Method

Easy to sort

Simple to totalServe as proof of purchaseImportant for tax purposesSlide5

Calendar Method

Write in income whenever you receive it

Write in when bills and expenses are dueAs you pay each bill, cross it offAdvantageMay be used to plan for larger irregular expenses that don’t occur every month, such as insurance payments, property taxes, or holiday giftsSlide6

Envelope Method

Set

aside money for various expenses in separate envelopes on a regular

schedule, using expense categories from your spending planLabel envelopes with a specific purpose such as GAS or GROCERIES and the amount budgeted for each expenseSlide7

Envelope Method (Cont.)

When you receive income, put the proper amount in each envelope

When the time comes, take the money for the expense category and note the date and amount spent on that envelope

At the end of a month or pay period, transfer any money left into a savings or emergency fund accountSlide8

Advantages of Envelope Method

Works well for tracking and

controlling expenses

purchased with cashSimple, with far less recording or paperwork compared with other methods

Income

conveniently divided to cover all anticipated expenses

Easy

to see how

much money is available

to spendSlide9

Disadvantages

of Envelope Method

May be too tempting to “borrow” money day-to-day or if a shortage occursHaving cash readily available may encourage careless spending

Risky to keep a lot of cash at homeSlide10

Modified Envelope Method

Combines checks and/or specially designated savings accounts

Checks are used for larger fixed expenses, such as rent or mortgage payments, car payments, and utilities

Envelope method used for cash expenses, such as food, household expenses, and transportationSlide11

Checkbook Method

Paying by check for most

expenses, recording

transactions immediately, and keeping an up-to-date balanceRecord what each check is for, where it was spent, and the amountBalance the checkbook regularly and compare it with the monthly statement from your financial institution for accuracySlide12

Checkbook Method (cont.)

On a regular basis, total the expenses

recorded in your check register by expense categories and compare the totals with your spending planTotal amounts can be recorded in a binder or notebook to complete the picture of where your money is goingSlide13

Advantages of Checkbook Method

Provides valuable information about your spending patterns

Provides proof of payment

Two people owning a joint checking

account can write checks from one

checkbookSlide14

Disadvantages of Checkbook Method

Possible bank charges that add to your cost, such as fees for a low balance, for each check written, or ATM card and debit card fees

Joint checking accounts can result

in problems if there is no coordination. Checks may not be recorded and or the checkbook may not be balancedSlide15

Account Book Method

Keep a daily log of expenses in an account book that you can create or you can buy an account book

Across the top, write in columns for each expense category from spending plan, possibly including the amount budgeted

As you spend money or pay bills, record expenditures in the appropriate columnSlide16

Account book method (cont.)

On a regular basis (weekly, monthly, etc.), add all of the entries for each category to determine how much you spent

Or you may subtract each entry from the amount budgeted in each category to

determine how much you have left to spend

Each category can be compared to

spending

plan to see if goals are being metSlide17

Advantages and

Disadvantages of account book method

Advantage

- provides a more accurate, up-to-date picture of your financial situationDisadvantage – everyone in the family must be diligent in recording expenses almost daily for records to be accurate and

up-to-dateSlide18

Computer Software Method

You can create your own expense sheets and tracking system by using a basic

computer

spreadsheet programYou also have the option of purchasing a commercial software program designed specifically for personal financeCheck with these companies to determine what program may be right for youSlide19

Advantages of Computer Software

These programs usually print checks

Balance checking account

Identify tax deductions

Provide graphs to help you analyze your financial situationSlide20

Strategies to Track Spending

Keep records simple

A

void unnecessary detailAppoint one person in the household to record family expenditures

Set a regular time for record-keeping

Getting

behind can make it a challenge to catch upSlide21

Strategies to Track Spending (cont.)

Analyze Expenditures Regularly

A

re all expenditures listed?Are all financial obligations being met?

I

s

spending within your income?

A

re

you satisfied with how your money is being used?

A

re

you satisfied with the amount being saved?