One of the most important aspects of personal finance is simply tracking your finances. There are three key things that you should track: all spending (monthly), your net worth (yearly), and your minor assets (yearly). To be successful in personal finance, you must know where your money is coming from, and where it is going.

At the end of each month, I download the transactions from all my payment cards (e.g., debit cards, and credit cards) and paste them into a spreadsheet where I can categorize each transaction. Avoid using cash for transactions and use transactional cards to make tracking of spending easier. Once I finish categorizing the transactions, I can assess how my spending compares to my budget and other months. I keep a monthly log using Excel that looks like what I have included in the Table below.

As years progress, and your income increases, it is important that your living costs don’t increase and negate the increased compensation – this is called lifestyle creep. Your aim should be to maintain the same lifestyle costs as your income increases and use the increased money to invest instead of funding a more expensive lifestyle.