Bookkeeping is often used for handling business finances, but that doesn’t mean you can’t use it for personal purposes. Just like how it helps businesses in Singapore, bookkeeping can provide the same benefits on your personal finances in ways mentioned below.
1. It helps achieve your goals
If you’re saving up for a house, a car or a dream vacation or are paying debts, it helps to keep track of your finances and budget your income easily. Keeping track of every bit of expense and knowing what’s at stake for every unplanned purchase will keep you focused on why you shouldn’t spend extra on a Starbucks coffee or why there’s no need to buy yourself a new bag when the current one is still fine.
2. It keeps track of where your money goes
Bookkeeping helps you solve the mystery of how you spend your money on a daily basis. Keeping records of your day-to-day expenses is necessary before you’ll be able to budget your money. A spreadsheet can help track and categorize your expenses; just make sure to list the things you bought at the end of the day. You can collect receipts of purchases or take a photo of them for easier recording later. Do the same for monthly statements and household bills.
3. It keeps track of your income
After identifying your expenses, do the same on your sources of income. Your income could be from your work, a part-time job or your parents. This will give you a clearer picture of your financial status, and makes you more efficient in managing your finances to ensure you’re living within your means with savings you can turn to in case of emergency.
4. Determine if your expenses is within or over the budget
Bookkeeping is something you do regularly, so you’re able to determine right away if you’re spending within your means or whether you have extra to treat yourself. If the records say that you’re over the budget, adjust accordingly. Minimize unnecessary expenses and utilize your income wisely until you’re clear of debt.
Controlling and monitoring your personal finances is much easier when using bookkeeping methods. As simple as maintaining a record of your day-to-day expenses, you can keep track of your expenditure and be able to decide what unnecessary purchases to avoid to save more or determine whether you need more sources to help increase income.(Source: Business Talk)