One of the most important but sometimes neglected rules of personal finance is keeping records. Records of what? Everything!

It is quite easy to keep records nowadays with the advent of computers (and software programs), but if you are a more old-fashioned kind of guy (or gal), you can always use a small ledger where you can write what you have spent or received. Whatever you use, just be diligent in keeping track of  your cash flow.

Record by making a spreadsheet. Information such as earnings (and your partner’s), regular expenses (utilities, mortgages), food, car, vacations, and other categories that could cover a financial year. Compute the totals for income and expenditure as you go along.

Don’t forget to include bank, savings and credit card accounts and record an initial balance. Find all the cash you have set up a cash account and record your cash total.

Prepare cubbyholes or folders where your receipts will go (label them accordingly as utilities, groceries, miscellaneous, etc.). Keep all your receipts during the month so you can compare them against credit card bills, etc. You can throw receipts and bills out at the end of each month, making sure that you’ve faithfully recorded them. Don’t forget to record every cash transaction, even those which do not have receipts. Record the payee of every check you write in your checkbook.

Invest in a good finance software package that would let you set up your financial records and tally amounts with just once click of the mouse.

The reason for all of these financial recording is that eventually you will be able to budget and predict future spending.