Tracking expenses vs Setting a budget

[Cheema02]

Tracking your expenses is a good habit to have. Or I thought so. But I recently came across an advice where tracking expenses actually does nothing for you but rather what we should do is just set a budget for every month. No need to track every dollar spent as long as it is within the budget. What do you think? Personally I believe tracking expenses makes us mindful of what we spend the most on and what we should lessen next time. Is it necessary or no?

the most important approaches which are really helpful in daily life. When we manage our finance, we higher different approaches but I think the best approach is that which is closed your habits. So if we manage finanace in such a way that first we track our expences then we make planes for purchasings and this approach really helpful and keep us aware according to our budget. Because through this we aware about which the actual thing should be focaused and where most of the money goes and we protect from unnecessary purchasing. This approach helps a lot to make better decisions in future. The second helpful approach is that we should limits and control on overall spendings. When an individual understand his spending patterns then he track every small expense. And mostly people staying within monthly budgets. So the learning point is that we should follow both approachs first we track expanses so we understand our spending patterns then we use a specific budget and make review our spendings so this way we manage our finance in simple and efective manners.

[Jewan420]

Tracking your expenses is a good habit to have. Or I thought so. But I recently came across an advice where tracking expenses actually does nothing for you but rather what we should do is just set a budget for every month. No need to track every dollar spent as long as it is within the budget. What do you think? Personally I believe tracking expenses makes us mindful of what we spend the most on and what we should lessen next time. Is it necessary or no?

It depends on the financial situation of the person and the family needs. If your income is low and the family needs are high, then you will not be able to do anything by setting a budget, because even if you set a budget based on your income, the budget wall will break very easily. In this case, you need to track the expenses and control them.

If the income is more than the needs, then you can set a budget to prevent unwanted expenses and waste. At this time, tracking expenses will not be effective, but rather it will increase waste. So, both tracking expenses and setting a budget are effective or unnecessary, depending on the family and financial situation of the person

[Makus]

well, some every one's opinion on this cannot really be the same, some people prefer to track their expenses even though it doesn't reverse any financial mistakes made they just do it so they can be able to learn in case of next time. But it is better to set a budget instead because if you do that you would have a limit that you wouldn't be able to exceed carelessly. Tracking expenses without setting a budget would just make yoi overthink about things you would have done differently and it won't change anything

[mindrust]

You shouldn’t only track your expenses. You should track everything you own and what they produce or cost. Liabilities, assets, income, receivables, expenses, debt, future simulations, analytics… that’s the only way to have control over your finances. Otherwise you stay blind financially. You figured the expense part of the puzzle but the puzzle is way way bigger than what you revealed. You can hire a personal accountant/assistant for this task especially if your finances are a mess and you don’t have enough time to track all those stuff yourself but not tracking them is the part that creates the real trouble.

[rachael9385]

If we want to really go with the one that's better then its going to be setting a budget because if you actually do this there would not really be any need to track yiur expenses. setting a budget makes it easy to have a plan you are working with. A lot of people mismanage funds and spend recklessly on things they would start regretting because they don't make a proper plan before starting their expenditures.

[Felicity_Tide]

Is it necessary or no?

So there is an advice that says 'tracking your expenses does nothing for you'?, but how about I tell you that tracking your expenses can do so much for you?. You see, the Internet is a massive place that accommodates everyone and their ideas, but you should understand that what works for you might not necessarily work for others. Everyone is entitled to their own opinion. Now, when it comes to tracking your expenses, I think it's necessary. The idea of setting budget might not be adhere to at all times especially when you're being forced to improvise, probably as a result of unplanned expenses that just pop out of no where. Mind you, tracking your expenses also make you stay on track, giving you idea of how much you spend on an average, which technically also sounds like setting up a budget. You know what, I think both of them are great... While you set your budget, also track your expenses.

[Hypnosis00]

Basically if you have a budget, there would be no need for you to be tracking every single expense because the budget is supposed to cover all those areas. If you budget your income the best way, why would you need to track your expenses when you’ve clearly outline and allocate some money for the expenses? As a good budgeter you should know what you spend most on and what you spend less on and how to optimize it,  so that you can effectively distribute your income in the budget.

So I will say tracking your expenses is good but not really necessary.

Tracking your expenses will be helpful if you want to get rid of your unwise spending, but if you have already made a budget based on your income, then its no longer necessary. Just stick to your budget and never cross your line so that financial issues will be avoided. Discipline is a must, so that you can control yourself and control your emotions so that you won't end up overspending and regret after because you have used up your funds intended to pay the bills.

[HONDACD125]

Tracking your expenses is a good habit to have. Or I thought so. But I recently came across an advice where tracking expenses actually does nothing for you but rather what we should do is just set a budget for every month. No need to track every dollar spent as long as it is within the budget. What do you think? Personally I believe tracking expenses makes us mindful of what we spend the most on and what we should lessen next time. Is it necessary or no?

Budgeting properly can only be possible if you track your expenses, because you won't know where you are spending the money if you don't track your expenses, because when you make a budget, you should know what expenses it is going to cover, but if you are referring to creating a overall budget for the whole month and then not caring about where the money is going, then that's not the right way to do it, because your budgeting won't work at all this way since you might miss important things while spending money on things that aren't needed.

Tracking your expenses allows you to decide what expenses you can cut at the end of the month because you will know where you spent the money in the whole month, but if you haven't even been tracking your expenses and you don't know what you have spent the money on, you won't be able to cut your expenses, and you also won't be able to make an estimate about how much your budget should be because tracking your expenses allows you to have a clear estimate about your essential expenses of the month.

[Oasisman]

Tracking your expenses is a good habit to have. Or I thought so. But I recently came across an advice where tracking expenses actually does nothing for you but rather what we should do is just set a budget for every month. No need to track every dollar spent as long as it is within the budget. What do you think? Personally I believe tracking expenses makes us mindful of what we spend the most on and what we should lessen next time. Is it necessary or no?

If you're just tracking expenses, you might miss something necessary, and that will hurt your budget. So, I guess sometimes it is not necessary to keep tracking what has been spent, just include everything when you set a specific budget plan. That way, you will never miss all the necessary things you need to pay for. Also, don't forget one of the most important thing save something, and that should be included in the budget plan.
Tracking expenses can also be a good reference in the future on what should not be included in the next budget plan, in order for you to effectively save more money. Eitherway, setting a budget should always be the priority.

[Natalim]

Don’t focus on just one area. If you have a basic idea of how business or personal finance works, it’s really simple, just follow the basics.

If you’re serious about budgeting, it always comes down to two things:

income
expenses

That’s it. That’s how you know if you’re actually positive or profitable. If your income is fixed, then the only thing you can really control is your expenses. You prioritize needs over wants. The problem with a lot of us is lifestyle creep. Once income goes up, lifestyle goes up too. That’s why even after a promotion or salary increase, people still end up drowning in debt. They suddenly feel like they can afford everything.

It’s way better if you track everything on paper or in an app. Once you see the full picture, it’s harder to lie to yourself.

[Botnake]

You really need to track your expenses so you can monitor where your money goes, if you are still managing your funds wisely or just spending like one day millionaire. That's the only way to determine how much you'll set for a monthly budget, so that overspending will also be avoided, or minimized at least.

But in the long run, there should be a fixed budget for monthly expenses, not just tracking expenses alone as it won't be useful at all without providing an outline for good budgeting throughout the whole  month.

[Kasabus]

Know the amount of your income, as much as know your expenses daily, weekly or monthly. Then tally it all until you come up with a sum amount. Then compare both, that's how you'll know if you are managing your finances well, or you keep spending above your income.

The point of tracking your expenses is to find validity to how you spend your money, but that won't make an impact if you do nothing about it. This is why you need to focus on creating a budget based on your income, not based on your ideal needs and wants as you can always adjust them if its necessary.

Above all, prioritize saving for future investments, as that's the point of budgeting, to build financial stability in the future.

[Pablo-wood]

...

We can have both in place, while we set budgets for every month or week depending on how we generate our income we can also track our expenses at the same time this will help us checkmate and ensure our funds are spent on the necessary things it was actually budgeted for reducing unnecessary things and extra expenses.

There could also be unforeseen circumstances that might arise which pushes us into spending more, in cases like this we need to look out for a more stricter measure to ensure we don't become too extravagant trying to meet up with the situation at hand.