ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It makes you conscious about your money: The more you track your expenses and income by writing them down, the less you will tend to feel lost and clueless about your money situation.

Detailed explanation-2: -Writing down all of your expenses is crucial, said Pelayo. She suggests recording every penny that you spend rather than trying to approximate, which can lead to errors. Pelayo recommends using whatever method fits you best, whether that’s writing it down on paper, creating an Excel spreadsheet or using a website.

Detailed explanation-3: -The basic rule of thumb is to divide your monthly after-tax income into three spending categories: 50% for needs, 30% for wants and 20% for savings or paying off debt. By regularly keeping your expenses balanced across these main spending areas, you can put your money to work more efficiently.

Detailed explanation-4: -Budgeting or expense-tracking apps Budgeting apps like You Need a Budget and Mint are designed for on-the-go money management, letting you allocate a certain amount of spendable income each month depending on what you’re taking in and what you’re paying out.

Detailed explanation-5: -Tracking and categorizing your expenses can help you determine what you are spending the most money on and where it might be easiest to save. Begin by listing your fixed expenses. These are regular monthly bills such as rent or mortgage, utilities and car payments.