One of the first steps for anyone attempting to control their financial habits should do is get to know their numbers. In other words, you’ll have to begin tracking your spending. A good starting point is to take inventory of how much money you bring in each month, and how much of that money you spend.

You should have a clear picture of your fixed expenses and your variable expenses — but sometimes it can be hard to be realistic with the expenses that aren’t always consistent. For instance, your rent will not change from month to month, but your coffee budget will.

How we spend each week is dramatically hard to estimate. Some people live their lives on a rollercoaster income, but the majority of us also live our lives on a rollercoaster expense ride that we can’t get off. One way to control these spending habits, though, is by tracking your spending.

How can you track your spending?

1. Write down your expenses and track by hand

2. Use a spreadsheet and update daily or weekly

3. Use a budgeting app (like Cleo or Mint)

4. Keep your receipts

5. Follow up with your bank statements month to month

From there, choose a set amount of time that will help you gauge some practical ways you can cut back on spending or better balance your monthly expenses. Once you get going on the process of tracking, it can become a great way to hold yourself accountable and to learn how you should manage your finances. Not to mention, you’ll also learn some great lessons.

What will you learn from tracking your spending?

1. You begin to understand how much fluctuation there is week to week

It’s fairly obvious that some weeks in your life are more expensive than others. However, the kicker is that you can find ways to offset those more expensive weeks by learning what parts of your life can be costly. If your social life or your physical health tends to be your largest expense, set up a bank account that is specifically for those expenses. This way, you can control your spending limits, while still allowing yourself to enjoy those important hobbies.

2. You learn practical and realistic places to cut back

Every financial expert’s favourite tip is to reduce your spending. It’s that simple. However, what they forget to account for is that it’s not always simple to make these decisions. Which parts of your budget do you cut back and how much can you afford to cut back? These questions are easier asked than answered. Once you start tracking your spending, making these decisions can become a lot easier. Personally, I noticed how easy it would be to avoid buying fast food and going out for dinner if I spent more time meal-prepping and planned outings with friends once a week rather than multiple times in a week.

3. How heavily social influence plays a role in your financial situation

A huge part of our spending habits reflects in those closest to us. We used to only spend time with friends and loved ones, but now we’re surrounded by influencers and social media friends who we don’t know much about. The parts we do see of their life often include where they spend their money and what they buy or wear. These expectations are unrealistic and dangerous because they set you up to play a game of comparison that no one is built to win. Focus on making yourself happy. If you know what you’re doing is right for your money and you’re not struggling, nothing else and no one else should impact those feelings.

4. How greatly your mental health improves with financial security

This isn’t a shocking lesson to learn. Tracking my spend made me realize that now that I’m more aware of my spending and have more financial security, I spend my money a lot more freely. Is that necessarily a good thing? No. However, it’s a good reminder that the more secure you feel in your financial life, the easier it is to live a stress-free life. These financial habits that I thought were only going to positively impact my wallet have greatly impacted my mind. So, remember that if you are struggling now, you’re going to be okay eventually — it just takes time.

How much do I spend in a week?

For fun, and following a new trend I saw on YouTube recently, I decided to film and vlog a week in my life to share how much I spent. If you’d like some insight into my spending habits and more about the lessons you can learn from tracking your spending, check out my latest video: