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A financial literacy podcast from WKNC 88.1 FM HD-1/HD-2.
Unknown Speaker 0:00
Hello, and welcome to another episode of WKNC Money Talks. I'm your host oculomotor. And in this episode, we're going to talk about the best way to start tracking your finances effectively.
Unknown Speaker 0:20
Let's get started right into this topic. And the first most important thing is I have a question to ask you, how are you tracking your finances right now? So are you using an Excel sheet? Are you tracking it on notes? When you're making payments to people? How do you figure out how much you owe someone think about it for a second, if at any point you mentioned, you put it in your notes, if you put it into your brain, or if you write it down on a piece of paper, you're mostly right, you know, it's a good thing that you're keeping track of something to begin with. But there are many other tools out there that really help you effectively manage your finances and understand where your money is going. For a majority of college students, they don't really work here. Rather, they get an allowance from their parents. And the first thing is to realize how much money you're getting paid each month. Now for me, I get a standard of $400 a month. And that's for everything, and I live in an apartment. So I will be accounting for food, I will be accounting for eating out spending time with friends, or any other general expenses that may come my way that might need that 400 a month, take a second to think about how much you get each month, if your result varied if you don't know how much you're getting. Or if you're just asking for money. As you get along, the first thing you should do is stop doing that. Because you don't know how much money you're spending. The only thing you know is how much you're requesting. Either ways, it's going to be overshadowed each time you request for more and more money and one month you'll be spending 1001 month you might be spending 200. And the other month you might be spending 3000 It's very hard to track where money is going. If you don't have a set value of amount of money you're getting in each month monthly tracking is very efficient, because it gives you an idea of how much you need to spend how much you need to save each month. And one of the best tools I'd say right now, if you want to do these things manually, is to use Excel. Now most of us do probably know how to use Excel. And it's very simple. You record your income, the amount of money you're getting in. And every month, if you can go ahead to your bank account, download a statement and try to import that statement. Now I know importing might sound tedious, but do it once a month, get a copy paste the items copy paste the cost of these items, figure out what you're buying. Because on bank transactions, often you're not going to see the actual thing you bought, you're going to see the transaction vendor or things like that. So you may not know what you actually bought, the more ideal thing to do is that each day you go back home, sit down and record everything you spent your money on, which is the probably the best way to do things. And that's what I personally do. I have an Excel sheet where I keep track of all of my different expenses. And I subtracted from the total each month to see how much money I save. One more thing that I do with my Excel sheet is I sort things based on its category. So I divided into three main things shopping, food, and necessities and necessities will be things like your college books paying for your homework, if you have to pay for some flight tickets here and there, that's completely understandable. Then it's food, which is the other category. So consider that eating out getting groceries, ordering UberEATS DoorDash, whatever it may be. And of course, the third thing would be shopping. So if you want to buy yourself some nice clothes, go out shopping with your friends, or just do attend some events or something like that. You can always blow some money there if you want to. Now there's probably a question on your mind, why are you tracking this manually, and why not just look at your bank statement each month or look at the budgeting or spending option that's available in your bank app. And honestly, that's a good idea, I definitely do try to use the budgeting or like track spending section in my bank, like I have access to a Bank of America bank and I have access to a PNC Bank, both of them have sections in which you can track your spending, and you can figure out where your money is going. But more often than not, I find it really inaccurate because it's not giving you the best details about where these expenses are going. And sometimes it doesn't even categorize expenses. And finally, the other main reason is because you will be able to manually type things out and each time you look back at it, or each time you have to input some new information or new expense, you have a little bit of guilt in yourself for doing that accounting. In all honesty, it sounds like you're giving yourself hell. But at the end of the day, you're going to realize that it's better because you're going to start being more conscious of your spending. And so with that we have ways to track your data points are from this Excel sheet that you have. You're going to start noticing you might have some extremities, you might have some things that are popping out saying hey, why did I spend $300 This month on shopping or Hey, why did this much of money go to this place? Or hey, why am I eating out so much? The main thing I want to say
Unknown Speaker 5:00
focus on right now is going to be subscriptions, as well as unexpected expenses that you may find it when you start recording your expenses onto the Excel sheet. Now, the biggest thing, which many people do not do is cancel subscriptions. Subscriptions is basically a way of the company taking money from you every month, and you're not even realizing it. For the most part, you may need subscriptions for some essential services, well, services that you may consider it essential like Netflix, or, you know, Prime Video, or Disney plus whatever it may be. But then you have these other expenses, these other subscriptions that you'd never really signed up for, or you had a free trial with them, which you forgot to cancel your subscription. For example, I once got charged $55 for the year for one of these applications, I just never ended up canceling because it was my mistake of starting a free trial and then not actually canceling. And the issue is all these companies will have some sort of way to make it so that it's not possible for you to get a refund, because they'll put it in their terms of service saying once you've accepted a subscription, you can stop it, it's non refundable, and you would have unknowingly accepted the terms and conditions before you bought this. So that's a big point that you can definitely look into when you're having these expenses might just save you hundreds of per month, it might just save you even five bucks a month, it's still money that you've saved. The next thing you could see is looking for outliers, specifically in food or things like that. So in food specifically, you can see where you're spending your money the most and try to see, hey, if I'm going to spend $20 on Taco Bell each month, how can I make it so that I make food at home and make it for cheap? We talked about this in the previous episode about how making food at home is so much cheaper, but you're just going to be able to figure out a way to make things a little bit cheaper if you see what you're spending your most of your money on. And what's a good thing to do is to just look over this Excel sheet every once in a while maybe once a week, or once every couple of days, look at it and tell yourself, Do I really need to be spending this much money and make it so that it's kind of etched into your head. So you feel like you have no other option. But to think about, oh, today I'm going to be adding some more things to that Excel sheet. And the list is only going to get bigger and bigger. And that sort of guilt kind of comes into you. And you're going to say hey, no, maybe I won't take a Starbucks today. Or hey, no, maybe I won't go ahead and buy this concert ticket. So it's a it's a, it's a psychology trick. That definitely helps the way you're spending money to be aware of how you're paying for things, because that's the most important thing. And lastly, we're going to talk about payments between friends. And this is probably where people owe each other the money the most. Or this is where most of your money is going. Because you're making expenses with your friends saying, hey, I'll cover you this time, just pay me back later. And this becomes a big problem. And I know a lot of people track their expenses on notes, or like they send messages to each other or an SMS snapshot, whatever it is. And that's how they keep track of their expenses. And one application, which all of my friends always hate me for recommending it to them. But honestly, it has been a lifesaver and has helped track expenses a lot is going to be split ways. And split ways lets you track these payments between friends where you can add a transaction, choose who you want to pay With, and choose how much the each person owes, it can be either equally, it can be unequally by percentages. Or if you want to make like a split or things like that, there's really good, it's really good for calculations because it'll take care of everything for you. So if you know if I pay you $5, but then you pay someone else $6. And things go around and a lot of money and a lot of transactions go around, it's going to simplify the amount of money or the amount of transactions you need to be sending to each other to just one simple transaction. So we use it heavily for me and my group of friends. And we always every once a month or so we see we've had like 30 to 40 transactions as wages just tells us how much to pay each other. And this is also a good thing, because in split ways, you're going to see that money number rack up saying you know, you owe this person this much money. And you're going to think to yourself, hey, now this time, I'm going to pay for this so that my amount gets reduced. And you say you sort of try to balance it out, which is a good thing to do. Split wise also has the capability to export these transactions to an Excel sheet. So if you want to plug those in as well feel free, you know, copy paste the amounts you were owed, or the amounts that were totally paid so that you know how much you're spending with your friends versus how much you're spending alone. And then you might be able to figure out maybe these friends that I'm hanging out with are making me spend too much money, maybe I should start getting new friends. I mean, not getting new friends, of course, but like, start moderating your expenses in a more rational way to reiterate a lot of what we talked about, it's mainly just making sure you're very aware of how your money is going in and out. And that's going to be the biggest factor affecting how you save money and how you spend money. If you are hyper aware about things about transactions that are happening if you're hyper aware about who owes you money, and how much you are paying for people, and if you know your subscriptions and if you know the things and the payments that are
Unknown Speaker 10:00
waiting around, you're gonna be able to realize that, hey, I don't need to make this transaction or hey, you know, I'll have this much of money at this point of time. And this will be good to make you make smarter decisions. And overall, just save more money and be more conscious about your spending. And I know this episode is pretty short. But next episode, we're going to talk about investing for college students. And it doesn't matter if you have $1 or $100. We know everyone wants to make money. And we're finally going to guide you on how to make these investments. PSA, I'm not a financial adviser. But you know, I'm giving you the best possible advice you could do with your money in an efficient way to make you start investing and getting into that world of investing where you're aware about what is there to offer. Thank you so much for listening, and I'll see you in the next episode. Bye