How to evaluate your spending?
Most of us spend here and there without any reason. Such spending can soon pile up.
You need to keep track of your spending to stay within your budget.
Creating a spreadsheet with a list of expenses can help you keep track of your spending.
Here is an example of some expenses that you may need to track:
Mortgage or rent, Property taxes (If you own), utilities, groceries, telephone, Condo fee, repairs and maintenance, home insurance, kids’ allowances, kids’ clothing, kids’ toys, car payments, gas, car repairs and maintenance, public transportation, telephone, internet, clothing, jewellery, sports, debt repayment, emergency fund, savings for children etc. Do not leave anything off the spending analysis worksheet.
A detailed listing of your expenses and keeping track of these expenses will give you an idea where your money is going.
Grab your bank statement and credit card statement and start entering these expenses in your spread sheet. At the end of the year add these expenses and it will give you a total you spent in each category.
Calculate monthly average of each expense.
A comparison of your yearly spreadsheets can give you a clear picture of your expenses in each category. For example, a comparison of clothing, eating out, kids toys etc. can show you a clear picture if you have overspent in any category.
Next you need to figure out your yearly income on monthly basis. A comparison of your monthly income and expenses is the best way to track if you have a deficit in a month. This can help you make a very good budget.
Mansoor Suhail (Mani)
Accountant
MS TAX – BSBA – EA – ICIA – RA
1804 – 1360 York Mills Road
North York, ON, M3A 2A3
TAX for CANADA AND U.S.A
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