Tracking your Finances

I know that some people and businesses (primarily MSMEs) do not track their finances. While I am sure there could be various reasons as to why that is, today, I would like to make the argument for tracking your finances.

The worst case scenario for not being intentional with your finances is probably some form of financial ruin. For the average individual or business however, the cost of not tracking your finances happens to be the benefits you end up missing out on.

As an individual, having your monthly expenses condensed into a single figure can be the wake up call you need to realise that your current lifestyle is unsustainable. At that point, tracking your finances is also beneficial because you now have access to data which you can review to seek out opportunities for cost savings. The result of this is increased savings. You could then contribute these savings towards major expenses such as a trip, home or car or invest it to generate future returns.

Businesses also benefit in a similar way to individuals. They can generate higher savings which may result in higher profits for the owners or be reinvested to generate future profits. In addition, the availability of historical data will help the businesses operate more effectively, they will be able to lay out more realistic budgets for the future, better manage their inventory and plan investments towards their growth. Not only that, but in the event that a business would like to raise funding, potential creditors or investors are likely to request the business's financial information for the purpose of assessing its financial health and/or estimating its future potential. Thus, a business that is unable to provide financial records may find it difficult to secure funding.

With savings and investment being key components, the missed benefits of tracking your finances could easily compound over time.

Click here to take a look at my basic spreadsheet template for tracking your finances.

If you are a small business owner, I would love the opportunity to work with you to figure out the best way to track your finances all completely free of charge. You can reach me at simconx.mt@gmail.com.