Keeping an eye on your finances on daily basis is a crucial habit to develop if you are cautious about your financial health. Before your poor spending habits take a toll on you, it’s wise to take a few minutes each day to review your spending, income, and budget. A daily financial review can help you identify areas where you can save money and make more informed decisions about your finances. Whether you are working towards paying off debt, saving for a down payment on a house, or simply want to be more aware of your financial situation, a daily financial review is all you need to stay on track with your finances. I’ve helped hundreds of students at Fortune Academy with financial planning and let me put forth some of those insights which will help you understand the importance of daily financial review.
To cut off unnecessary expenditures:
It’s very crucial to understand spending patterns to make more informed financial decisions and eliminate the expenses that won’t make any difference even if you don’t spend on them. Additionally, a daily financial review allows you to catch overspending as it happens, rather than waiting until the end of the month to see where your money went. This daily activity can act as a powerful tool to achieve greater financial stability in the longer run.
Habits matter, not earnings:
No matter how much you earn, you will always be out of funds if you don’t have a certain financial discipline. Because here the money is not the problem but the mindset is. Personal finance is not as complex as it may sound. Just by altering financial habits a little bit, anyone can make money work for them. It doesn’t matter what your current earnings are. The only thing that matters is how attentive you are toward the way you spend.
To understand the flow of money:
It’s one of the common experiences of not understanding where we have spent our money at the end of each month. It can be easily solved by daily financial journaling. Once we have a ledger that displays what we spent, where we spent, and on which day we spent, there will never be a dilemma about where our money was gone. This will help us identify patterns and ultimately leads to a robust financial position.
Consequences of avoiding daily financial review:
Your active income will be drained out:
It has always been advised by many financial gurus to not rely on a single source of income. Yes, that’s a one hundred percent valid point. But on top of that, there are people who not only avoid working for multiple income streams but also spend their active income without keeping a track of it. This is a financial disaster and will have potential consequences if not addressed before it’s too late.
You can’t experience different facets of life:
All of us are blessed with only one life and the question is, are we here to experience life to its fullest or to live with never-ending financial troubles? This world is now equipped with different instruments like never before and it’s completely up to us to leverage them. Make sure that poor financial planning doesn’t become an impediment in experiencing this one and only one life.
You will be stuck in a perpetual financial loop:
If you are someone who feels the beginning of the month like heaven and the end like hell, you better notice quickly that you absolutely lack financial discipline and it’s high time you take some action and save yourself from the serious consequences of it. The best way to start is, as we have discussed in this blog, to start keeping an eye on how you are spending on a daily basis and the best way to do it is to start with journaling your daily expenses.
How to tackle this?
There are numerous budget-tracking apps available out there. But, if you feel it’s unnecessary to put your data on the internet, even a simple excel sheet could also work. Create a ledger consisting of details of all the expenditure corresponding to every single day and make sure to maintain a column where you mention the reason for a particular expenditure.
To conclude, you must be aware of where your hard-earned money is being spent unnecessarily which will help you develop good financial habits and ultimately save you from falling into a debt trap. This can be done quite effortlessly using a simple excel sheet and this will hardly take ten minutes to review it. If you want to hit your financial goals without getting overwhelmed, you will definitely love my fortune-tuning webinar where we will not only address your financial aspects but also work towards your overall well-being. Make sure to check that out!