Most often we look at our financial statements (e.g. M-Pesa or Bank) and ask ourselves, where did all my money go?
In a world filled with myriad needs and one-click purchases, tracking expenses might seem outdated, but it remains a powerful tool for maintaining financial health, achieving goals, and gaining control over your finances.
Tracking your expenses helps you understand your spending habits. Categorizing your expenses into food, rent, shopping, utilities, and fees — provides insights into spending and areas where you can save.
Using Technology is one of the things that can help you in Expense Tracking - For example, the SpinCrunch tool by Spin Mobile, analyzes your financial statements over a period; gives you a detailed analysis of your spending and even offers you prudent financial insights.
For instance, if you are spending more than 10 per cent of your income on betting, this tool will alert you on the need to check this expense. It automates tracking and provides you with detailed spending reports.
This makes it so easy for you to know where to cut down.
Tracking your expenses helps you achieve the following:
i) Setting and Achieving Financial Goals - Whether saving for a house, planning a vacation, or paying off debt, tracking your expenses is key to achieving financial goals. It enables you to create realistic budgets and make small adjustments that lead to significant progress over time.
ii) Avoiding debt and financial Stress - Unchecked expenses often lead to debt. Tracking spending ensures you live within your means, avoiding unnecessary debt and the stress it causes. Financial clarity brings peace of mind.
iii) Encouraging mindful spending- expense tracking fosters mindfulness, making you pause and evaluate purchases. This habit leads to intentional spending and a greater appreciation for what you invest in.
iv) Building Better Financial Habits - Tracking expenses cultivate discipline and financial literacy. It’s about making informed decisions, prioritizing needs over wants, and adapting to life’s changes.
v) Improve your saving culture - From Kenyan perspective, the art of saving is still a big challenge to many people. Africa’s average savings rate is 22%, yet Kenya’s is paltry 13%, while places like East Asia are as high as 34%. This highlights the need to improve Kenya’s saving culture.
The writer is the CEO and
Co-Founder - Spin Mobile LLC