Monitoring your spending
I'd much prefer if all predictions, at least the good ones, went exactly as predicted. However, sometimes reality is much different. You should be monitoring your spending by tracking and assigning purchases on a daily basis. What if you consistently find that your spending predictions are out of line with "real" spending. Comparing spending is necessary to keep your budgeting figures "real" and practical. It will be difficult to maintain a spending management plan on unrealistic money values. Keep expected spending figures at a practical value.
For example, you've predicted and planned that you will spend, on average, $195 for your electricity expense per month. But, try as you may, you consistently spend closer to $230 per month. Expenses that vary, like some utilities, should be averaged to a realistic value in your spending management budget plan. If you find by comparing your actual spending to your planned spending that the actual value is less, or more, than predicted, you must consider that your prediction may have been a little off. Comparing actual spending habits with predicted spending is essential to budget planning success. Compare your spending, and keep it real, and you'll succeed!
Comparing past and current spending will be helpful in analyzing realistic future goals. If you know you only have a specific amount of funding, after setting aside for expected expenses, you have a clearer understanding of how much you can set aside for future goals and approximately when they will be realized. Setting a financial goal only to find that it is not possible to complete the plan financially, or in the time allotted, can be discouraging. Compare to be realistic with your financial goals.
Comparing predictions with reality is important in keeping your spending management plan "real." Expecting more of yourself than realistically, financially, possible will only result in financial failures. You want to work towards financial successes. Don't live in a fantasy financial world. Don't set yourself up for failure. Individuals who do, tend to fall away from budget planning and ignore financial goals altogether. Comparing your past, present, and planned spending is essential to complete spending management. Creating, and properly maintaining, a complete spending management plan is the key to financial success.
Next in this four part series - PART 4: Adjust Spending
Click here to access Part 4 of 4
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