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Tracking Your Financial Progress

March 21st, 2012 Personal Finance

Shoring up your finances is no small task, and the older you get, the more you have to keep track of. If you're trying to gain firm control of your spending, one of the most important things to do is carefully track every dollar you spend. It's easy to have an approximation of where your cash is going, but the more detailed an idea you have, the easier it will be to find areas where you can afford to cut back a little.

According to The Simple Dollar, "keeping score" is a great way to improve your financial stability. Why? By playing a game against yourself, you may feel inclined to save more aggressively than if you were just winging it. Once you have the clear objective of lowering your spending by a specific amount every month, it becomes easier to keep track of where your money is going.

Calculating your net worth every week or month is perhaps the best way to gauge how you're doing. Add up your assets and subtract your debts from the total. Do this frequently and aim to increase the final number each time.

In order to do so, do your best to meticulously track your spending. This may even mean carrying a small notebook around and writing down exactly where your money is going every day. You can also sign up for websites that help make the task easier by dividing your spending into various categories. Figure out where you have excess funds and try to funnel that money into a savings account. Even a small amount every month will start to add up after enough time.