Phil's Personal Finance Tip of the Day:
The Key to Saving: Track Your Spending
By Gerri Detweiler | Credit.com
Can something that takes as little as five minutes a day change your financial life? Absolutely, say the proponents of that so-often-recommended piece of financial advice: track your spending. They believe it can be the key to a wealthier life, and research shows it may make you healthier as well.
There’s no doubt that tracking what you are spending can help you get a better handle on where you spend your money. The insights you gain — I spent how much on that? — may prompt you to curb your behavior in order to achieve your bigger financial goals.
Two years before they quit their jobs to take their dream trip around the world, Warren and Betsy Talbot started carefully keeping track of every penny they spent.
“Right after we started tracking our expenses we sat down for our monthly review together and discovered that our #1 expense after the mortgage was eating out,” says Warren. “We found we were spending $1,500 per month on all our dining out. Just by cutting this back to $500 month we were able to save over $24,000 in 2 years, which ended up being the same amount we spent in our first year traveling full time around the world.”
[Related Article: How to Live Like a Money Expert]
It’s About More Than Money
But what if tracking your spending did more than just shed light on where your money is going? In his book, The Power of Habit, Charles Duhigg shares research by two Australian researchers, Ken Cheng and Megan Oaten, who designed a four-month experiment where participants were instructed to write down every purchase. It took some time to get into the habit of recording expenses, but once they did, there were some surprising results.
To read the entire article from Gerri Detweiler | Credit.com:
http://finance.yahoo.com/news/key-saving-track-spending-060136567.html
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