Put feelings about money aside and concentrate on yourself or you and your family. We used to be that type of person but soon realized after starting this blog that it was a massive mistake. Most people who use a budget create wonky numbers in their heads based on the income they take home also called net income. You probably never thought you’d go backward to create a monthly budget but trust me, this exercise is a valuable tool. Using a Historical Expense Tracker to build a budget is the most crucial step toward accuracy by documenting where your money was spent. You need to know where your money is going every step of the way.
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The same is valid with budgeting, especially for those who want to create an accurate budget without tracking forward. Often, when humans are told to be patient or to wait, we become antsy and want to know now, not tomorrow. If you think about creating a budget using three months of historical data works just as well for someone new to budgeting. The idea revolved around seeing whether the user could handle a mortgage and everything that came with owning a house before buying a home. When I blogged about creating a mock monthly budget that included a mortgage, that’s where the idea of historical data came to fruition. CBB and I have discussed the value of historical expenses for creating a budget. In my 10-Step Budgeting Mini-Series, I discuss tracking receipts and their importance. You don’t have historical data to pull from.The only two reasons why you would want to build a budget tracking using present data are What we did is what most people would do and that tracks current expenses to build an accurate budget.Īlthough we still stand by the method of tracking three months of expenses to build a budget, you don’t have to wait so long.
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Years ago, before we created our budget, we didn’t think to use a historical expense tracker. If you can’t answer that question, you’ve put yourself in a spot of uncertainty with your finances. How many of you can tell yourself that you know where all your money is going? Importance Of Using A Historical Expense Tracker (Free Printable) Where Is Your Money Going? How To Start A WordPress Blog (Resources).
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