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It can feel really difficult to keep records of your finances and you may even think that it is a waste of time. However, keeping a record of what is going with regards to your household finances is as important as doing so if you were a business. You will be able to keep a track on what money is coming in and going out and where the money is coming and going from. It will help you to be able to budget, plan spending and know where your financial future is leading.

Once you set up a system for keeping your records then it can be really easy. It can be wise to have some sort of storage box or filing cabinet to keep hold of the paperwork. These days many people have paperless billing and finances, but there are still likely to be some important documents that you need to keep hold of. Letters from the tax office are particularly important if you have any!

It is really useful to have some sort of spreadsheet of all of your money coming in and out. This can be done on a computer but also on a piece of paper if you prefer. You just need a column for date, description and one for money in and money out. Then you can easily note down every transaction that takes place so that you can easily see what is going in and out, when and what the items were.

It may seem that this will be complicated, but once you get into the habit of doing it, it will be really easy. You can file each receipt or bill, if you want to and cross reference it against the entry in the records using a code of your choosing. You do not need to do this though and you probably will not have a receipt for every single transaction anyway. You can keep things as simple as you want, it will depend on how accurate you need the records to be and how much detail you want to have access to.

When you start holding onto paperwork it could mean that you start to mount up a lot. It is not necessary to keep it all though, so once you have taken a few months records and can begin to get a good idea of what is going on with your finances, then it could be wise to get rid of some of it. Financial paperwork and tax office papers should be kept but smaller receipts for items that cannot be returned need not be. Utility bills may not be necessary either, as you are likely to have online records that you can access anyway.

It is important to keep on top of things. Do not leave all of the record keeping to one day in the month, track it as you spend money and as money comes in. You will then be able to use it as part of your budgeting plan and cut back if you need to. You can also track where money is needlessly spent and cut back there as well.