• #budget tracking
  • #expenses
By IPSIPay team

4 Ways to Track Your Expenses: How Budget Tracking Apps Can Help

Today, we’re sharing some tips that should help you with budget tracking. Learn 4 life hacks to track your expenses and discover how expense tracker apps can save money.

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Tracking your expenses is a common practice now to help people achieve financial goals and spend more wisely.

Today, we’re sharing some tips that should help you with budget tracking. Learn 4 life hacks to track your expenses and discover how expense tracker apps can save money.

Why Track Your Spending?

The balance between spending and income affects our actual well-being. The more money you save, the more you feel secure about your future.

Yet, the 2020 report by Ramsey Solutions found that 60% of adult Americans had trouble with settlement for their “buy now, pay later” purchases. Experts agree that such habits may be the common cause of permanent credit card debts.

Thus, budget tracking is essential to avoid debts and reach financial stability. Here are some primary reasons you might want to track your spending and use expense tracker apps.

Avoid Overspending

Impulsive purchases are a common problem, especially if you run the household. But you can begin to manage your finances more reasonably once you start tracking expenses and monthly income. Expense tracker apps provide a 360-degree view of cash flows letting you detect irrelevant overspending and focus on essentials.

Manage Debts

Budget tracking helps you monitor when it’s time to pay debts to avoid penalties. Settling credit card debts on due is crucial for a good credit score.

The users of spend management software can monitor their credit ranking in real time as these apps have built-in benchmarks. More importantly, some credit ranking tools show what factors impact your overall score the most. They can show alerts to keep you from spending too much. This way, you get more control over your credit history.

Save Money for Your Financial Goals

Most people who consider expense tracker apps do it to save money. They may want to buy a car, invest in real estate, or aim to cut expenses. Reducing spending is no less important for managing personal finance than saving up.

Of course, you can set financial goals and follow them without specialized tools. It’s enough to calculate your budget and put down every expense. Still, expense tracker apps enable you to track your spending more conveniently. Mobile and online budgeting platforms have dashboards to set short- and long-term financial goals. However, they can help you to keep a schedule with a saving plan. They calculate the reasonable monthly amount you can set away and remind you when to deposit it on bank accounts.

Have a More Balanced Shared Budget

Many have experienced tension in a relationship with a partner or roommate because of careless overspending or unpaid utility bills. For that reason, tracking your spending is important to maintain mutual trust and properly manage a shared budget. You will see who covers which expenses to avoid arguments.

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4 Smart Ways to Track Your Budget

Before planning a budget and tracking expenses, you must analyze your current financial situation. Experts recommend collecting the receipts for the past month to see the total spent amount. Then you should sort them into separate stacks: utility bills, food, groceries, clothing, children’s products, etc. Revise each budget item to find out how to optimize them.

Once you finish, take the following steps to track your spending:

1. Check Your Bank Account Statements

Service fees may significantly increase your expenses. Thus, checking statements is crucial to clarify how much banks charge you monthly. Sometimes, it’s possible to reduce the following fees:

  • Excessive savings account transaction fees. Regulations limit cash withdrawals and transactions from savings deposits to six per month. So when you exceed the allowed limit, e.g., use savings funds to send money abroad, you pay a $3 – $25 fee. You can use a checking account or debit card instead to avoid it.
  • Overdraft fees. Overdraft fees are common when you don’t track your spending. An overdraft occurs when the transaction cost exceeds the available balance but gets approved by the bank. As a result, you get an outstanding balance plus additional fines. We recommend using virtual credit cards as a possible solution to such an issue.
  • Wire transfer fee. The average bank transfer will cost you between $45 to $50, so it would be much more affordable to use p2p payment platforms. Check the comparison of international money transfer fees from different services.

You should also set notifications in your online banking account. It will help you meet sufficient balance requirements and avoid unwanted fines. Besides, consider getting an expense tracking app to control all bank-related transactions like loan and bill payments. It allows you to export monthly Excel spreadsheets conveniently and revise them.

2. Segment Your Budget

Whether you track your spending using spreadsheets or budgeting apps, categorizing expenses is a must. Doing so lets you detect which group of expenses takes the most significant part of your budget. If it’s something you can do without, you can considerably cut spending.

Typically the segmented budget must consist of:

  • Monthly income (salary and any passive income)
  • Savings (emergency funds, money for big purchases)
  • Debt Payments (personal loans, mortgage fees, college loans, credit card debts) 
  • Food (groceries, meals at restaurants)
  • Clothing (adult and children outfit all together or separately)
  • Household supplies (cleaning and hygiene consumables, tools)
  • Personal (self-care, gym membership, subscriptions, entertainment)
  • Transportation expenses (car gas and maintenance)
  • Utilities (electricity, water, heating, internet, and cellular service)
  • Healthcare (medication, primary and specialty care)
  • Insurance (monthly fees for health insurance, homeowner’s or renter’s coverage plan)
  • Charity (donations to charitable organizations)

3. Prioritize Your Expenses

Try the popular scheme of a 50/30/20 budget. It’s a good option to prioritize needs over wants. You will need to split spending into three groups:

  • 50% for necessities
  • 30% for wants
  • 20% for savings or debt settlement

To make a personal budget suit your demands better, you can personalize it. The income and expenses of every person considerably differ, after all.

However, you shouldn’t use the funds for urgent payments to pay for your impulse purchases. Observe how well this method works for you within two-three months. You will see whether you can manage debts while saving.

4. Manage All Finances from a Single App

The primary advantage of expense tracker apps is that monitoring is less boring and time-consuming. Organizing expenses takes just a few minutes, and you can check transactions from many financial accounts. Moreover, it would be easier to readjust budget items and personal goals once you have an all-in-one app.

IPSIPay for Affordable Transactions and Expense Tracking

If you want to control personal finance and send money at low rates from your smartphone, use the IPSIPay app. It provides:

  • Free mobile wallet for international payments and money transfers
  • All debit and credit cards, personal savings, and a checking account in one place
  • Automation of recurring payments to settle bills
  • Access to transaction history for regular expense tracking.

Check the complete list of financial products and services provided by IPSIPay here. Go to Google Play and AppStore for free download and unlimited access to mobile money management.