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An Introduction to Expense Tracking

An Introduction to Expense Tracking

    Who doesn’t have a goal for the new year that involves money? Many of us have goals that involve making more money or managing the money we already have — but, no matter exactly what goal you might have for your money, you’ll probably need some baseline information about it. While understanding your expenses is basic, they make up some of the most important information you can gather about where your money goes. Tracking expenses can be a relatively simple matter and can provide you so much information about your spending habits.

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    Whether you’re working on creating a budget or you are trying to simplify the bookkeeping for a small business, tracking your expenses should be a first step. If most of your spending is done electronically (using a debit card or a credit card), you may be able to get away with just tracking your cash spending. Most money management software can automatically import those electronic expenses, further simplifying matters. You can also choose to use your own system, from the ground up, including setting up a spreadsheet and entering information by hand.

    Getting In The Habit of Tracking

    When it comes to tracking expenses, you can make your system as simple as collecting receipts and organizing them once a month. You might get a little more information from other expense tracking systems (listing them in a spreadsheet, using money management software or even choosing an online application), but all methods have one thing in common: you have to get in the habit of thinking about your expenses. It’s very easy to misplace a receipt or forget about any cash you spent. You may even think that a cup of coffee or a trip to the vending machine isn’t worth tracking — although those little expenses can add up amazingly fast. There are all sorts of opportunities to throw a kink into your plan to track expenses. You have to get in the habit of doing so, to reduce those lapses, and make sure that the data you’re basing financial decisions on is solid.

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    It’s also worthwhile to track your income in the same system that you track your expenses. This may seem like a no-brainer, because many people think that they only have one source of income: the salary that they receive from their job. In truth, however, most of us have additional sources of money, whether we hold a yearly garage sale, freelance or receive rebates. If you choose an application specifically created to track expenses, you’ll find that most have some sort of tool for inputting information about your income as well. If you decide to use a system of your own devising, such as a list of expenses in a spreadsheet, you’ll need to clearly separate income and expenses — place them in different columns, make one negative or denote the difference in another way.

    Using Your Information

    Once you’ve built up a lot of information about your expenses, you can use it to make a number of different financial decisions. You can easily broadcast your future spending — and plan out a budget. If you aren’t comfortable with the amount of spending you’re doing, you can also use all those expenses you’ve been tracking to help you set limits and finding places where you can reduce your spending. If, for instance, you notice a lot of lunches out, you could cut those expenses by committing to brown-bagging on a more regular basis. As long as you already have information on your expenses in hand, you can use it to make a long list of decisions much easier.

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    A Few Online Options

    While you could use a notebook or a spreadsheet to track your expenses, there are more than a few tools online that are able to handle all the details — and may have a few additional features thrown in:

    • Xpenser: If you’re always on the go, Xpenser can be a good option. It allows you to text your expenses in, helping you ensure that you don’t forget to track your spending between the store and home. In addition to SMS, you can email, Twitter, IM, call or manually add your expenses.
    • Moneytrackin’: For tracking expenses in multiple accounts — such as business and personal — Moneytrackin’ provides easy management of expenses between those accounts. You can also tag transactions and budget easily.
    • Mint: While Mint only tracks your expenses made through a bank account (checks, debit cards, credit cards), it does integrate expense tracking with a whole host of other features, including tools to help you analyze your spending and automatic expense categorization.
    • Buxfer: Another site that primarily tracks expenses made through bank accounts, Buxfer also has tools to help organize shared expenses — such as splitting the rent with a roommate.
    • Shoeboxed: You can add expenses by hand to Shoeboxed, but the site’s real value is that (for a price) they’ll scan in your receipts and upload them to your account on the site. If you do a lot of spending with cash, this site can truly simplify matters.

    No matter which option you decide to go with, I do think it’s worthwhile to pick a system that is as automatic as possible — writing down everything by hand and entering it into some sort of money management program just seems like a fast way to use up a lot of time. If you use another tool besides those listed above and really like it, please share it in the comments.

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    The Gentle Art of Saying No

    The Gentle Art of Saying No

    No!

    It’s a simple fact that you can never be productive if you take on too many commitments — you simply spread yourself too thin and will not be able to get anything done, at least not well or on time.

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    But requests for your time are coming in all the time — through phone, email, IM or in person. To stay productive, and minimize stress, you have to learn the Gentle Art of Saying No — an art that many people have problems with.

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    What’s so hard about saying no? Well, to start with, it can hurt, anger or disappoint the person you’re saying “no” to, and that’s not usually a fun task. Second, if you hope to work with that person in the future, you’ll want to continue to have a good relationship with that person, and saying “no” in the wrong way can jeopardize that.

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    But it doesn’t have to be difficult or hard on your relationship. Here are the Top 10 tips for learning the Gentle Art of Saying No:

    1. Value your time. Know your commitments, and how valuable your precious time is. Then, when someone asks you to dedicate some of your time to a new commitment, you’ll know that you simply cannot do it. And tell them that: “I just can’t right now … my plate is overloaded as it is.”
    2. Know your priorities. Even if you do have some extra time (which for many of us is rare), is this new commitment really the way you want to spend that time? For myself, I know that more commitments means less time with my wife and kids, who are more important to me than anything.
    3. Practice saying no. Practice makes perfect. Saying “no” as often as you can is a great way to get better at it and more comfortable with saying the word. And sometimes, repeating the word is the only way to get a message through to extremely persistent people. When they keep insisting, just keep saying no. Eventually, they’ll get the message.
    4. Don’t apologize. A common way to start out is “I’m sorry but …” as people think that it sounds more polite. While politeness is important, apologizing just makes it sound weaker. You need to be firm, and unapologetic about guarding your time.
    5. Stop being nice. Again, it’s important to be polite, but being nice by saying yes all the time only hurts you. When you make it easy for people to grab your time (or money), they will continue to do it. But if you erect a wall, they will look for easier targets. Show them that your time is well guarded by being firm and turning down as many requests (that are not on your top priority list) as possible.
    6. Say no to your boss. Sometimes we feel that we have to say yes to our boss — they’re our boss, right? And if we say “no” then we look like we can’t handle the work — at least, that’s the common reasoning. But in fact, it’s the opposite — explain to your boss that by taking on too many commitments, you are weakening your productivity and jeopardizing your existing commitments. If your boss insists that you take on the project, go over your project or task list and ask him/her to re-prioritize, explaining that there’s only so much you can take on at one time.
    7. Pre-empting. It’s often much easier to pre-empt requests than to say “no” to them after the request has been made. If you know that requests are likely to be made, perhaps in a meeting, just say to everyone as soon as you come into the meeting, “Look guys, just to let you know, my week is booked full with some urgent projects and I won’t be able to take on any new requests.”
    8. Get back to you. Instead of providing an answer then and there, it’s often better to tell the person you’ll give their request some thought and get back to them. This will allow you to give it some consideration, and check your commitments and priorities. Then, if you can’t take on the request, simply tell them: “After giving this some thought, and checking my commitments, I won’t be able to accommodate the request at this time.” At least you gave it some consideration.
    9. Maybe later. If this is an option that you’d like to keep open, instead of just shutting the door on the person, it’s often better to just say, “This sounds like an interesting opportunity, but I just don’t have the time at the moment. Perhaps you could check back with me in [give a time frame].” Next time, when they check back with you, you might have some free time on your hands.
    10. It’s not you, it’s me. This classic dating rejection can work in other situations. Don’t be insincere about it, though. Often the person or project is a good one, but it’s just not right for you, at least not at this time. Simply say so — you can compliment the idea, the project, the person, the organization … but say that it’s not the right fit, or it’s not what you’re looking for at this time. Only say this if it’s true — people can sense insincerity.

    Featured photo credit: Pexels via pexels.com

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