WHY it’s important to track finances?
Millionaire feels today, beggar-like status next week. Most of the working professionals are sure familiar of this - considered by many - true horror story.
This commonly happens on payday, most people thought that they still have a lot of cash on hand so they tend to spend more than usual without realizing bucks left are not enough for next week.
Tracing the root of this common financial problem is lack of managing ones finances.
Mary Grace Catague, Davao Area manager of Sun Life Grepa Financial Inc. told Sun Star Davao in an interview that tracking ones finances is crucial in maintaining your financial freedom.
“To have a lot of money doesn't depend on how big you are earning, it depends on how you manage your finances, and managing your finances will basically start of being aware on where your money goes,” she said.
She added that awareness is key – being aware of where your money goes, being aware of what are your spending habits and being aware of what should be your priorities.
For instance, she said, small amount spending combined can compose bulk of your spending fraction.
“Commonly, you do not mind much on the money you spent for your taxi fares, snacks, and cinemas, among others because you think these are just small amount. But, actually if you will list all your finances, you will be surprised that bulk of your money goes to those little spending,” she said.
Catague emphasized that high income does not necessarily equates to financial freedom.
“If you have a high income but you spend higher than what you earn, you will still end up having insufficient funds,” she said.
Meanwhile, for cases of extra funds, Catague said that one should know first their current financial status and what is the right financial instrument that will suit them.
Financial Literacy is very important and good thing nowadays a lot of financial experts are conducting seminars for it.