Tracking your expenses
Tracking your expenses is a crucial step in creating a budget because it helps you understand your spending habits and identify areas where you can cut back. By keeping a record of your daily expenses, you can categorize your spending into fixed and variable expenses, and prioritize your needs versus wants.
This information is crucial in creating a realistic budget that reflects your income and expenses, allowing you to set financial goals and allocate funds accordingly. Without tracking your expenses, it's difficult to determine where your money is going and how to make necessary adjustments to achieve financial stability.
