Why is accounting for expenses and income so important to everyone?

Hello, friends! In this article, I will share with you why it is important to keep track of the expenses and income of your personal finances. Read this article to the end to avoid the mistakes that many people make.

For me, managing my finances is not just going to earn a certain part of the money at work, then spend it on the necessary needs, and set aside part. In order to be more competent in managing your personal funds and future capital, you need to correctly and daily keep track of your expenses and income. After all, we spend most of all our earned money almost every day on necessary goods, services and various debts. And over time, there are situations when there is either little money left, or there is not enough money at all. And many people have questions where the money disappears?

In general, at the present time, most people are not very keen on keeping records. But in vain. I myself, before I started keeping records, spent most of the money and, moreover, wasted. And when for several months I had little money left, I decided to correct this situation and figure out what is the reason that I seem to be working, but I have no savings and free money.

At first, I started writing down my expenses and incomes in a notebook every day, and then I learned to keep all this in special programs on a computer and on a smartphone.

I took into account all the expenses – food, utility bills, public transport fares and the rest. After expenses, I wrote down the amount of income that I had – salary, advance payment, additional earnings, etc.

Yes, at the beginning it was difficult to count everything, write it down, save receipts, but as a result, after 2 months of daily entries, this has already become a habit for me. And now keeping records every day does not take much of my time.

What is the essence of accounting?

Sometimes it seems that the main task of financial accounting is to constantly track how much is spent and how much is earned. In fact, in my opinion , accounting for finances is the development of discipline and daily control, i.e. daily report to yourself about what, how and where spent.

Of course, in this way you can create different reports for yourself, and sum up the expenses once a week or once a month, thereby being aware of the movement of your funds in more detail and in detail.

Why is it important to keep track of your finances?

First of all, in order to feel money, because when you don't keep track of all this, when you don’t mark income, expenses, then you get a situation in which you don’t know how much you spend, you don’t know how much you earn, you do not know how much money goes.

And when you start counting all this, you immediately see what your situation is. Sometimes you may even end up spending more than you earn.

There are also statistics that those people who keep records of income and expenses, accounting for finances, they automatically spend 10-15% less immediately after they start keeping records, i.e. Accounting for finances is also a way to reduce your expenses. I will say, personally, that when I started keeping records, my expenses decreased by almost 25%, and the amount of savings, on the contrary, increased by about 10%.

In conclusion, I would like to make a simple point that if you do not control something, if you do not measure and observe it, then you, accordingly, do not manage it. Therefore, accounting for finances is the first step to managing your money, so keep records, write down, count everything and see how your financial indicators will grow.