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Do you track your personal finances?

April 2, 2021
Tracking your personal finances

Many people think that keeping track of their personal finances means observing and processing their income and expense information, which in turn helps them identify bad spending habits and improve. But is that all there is to it?

Let’s start by providing a definition for personal finances. Personal finance is a notion that covers the various aspects of managing your finances, not only tracking income and expenses.

Personal finance covers saving and investing, retirement planning, budgeting, banking, insurance, mortgages, tax and estate planning. The notion can also be referred to the whole industry which provides financial services to households and individuals.

So what does it mean to track your personal finances?

Tracking your personal finances is all about taking control of your:

  • income and expenses,
  • savings,
  • investing,
  • retirement planning,
  • estate planning,
  • banking,
  • insurances,
  • mortgages,
  • tax.

Unfortunately, there aren’t many schools that can teach you how to manage your personal finances and give you the financial literacy you need or why it’s important to learn the basics. Reading relevant blog posts and articles, listening to podcasts or free online courses can be of great help to you in gaining an understanding of what it means to track your personal finances.

The most important aspect to remember is that personal finances include budgeting, saving for retirement, paying off debt, spending money wisely and not leaving your inheritance to chance.

Being disciplined is of utmost importance. Cataloging your assets is the first step towards protecting them and making sure your loved ones are the people that would inherit them.

Let’s take a closer look at the different components of personal finances.


Different types of personal finance components that need to be tracked


Simply put, budgeting is a process of creating a plan on how to spend your money. It is essential to have it, if you want to live to the best of your ability while saving enough to achieve your long-term goals.

The most popular budgeting method is 50/30/20, where:

 – 50% goes toward your living essentials, such as rent, groceries, and transport

 – 30% goes to lifestyle expenses, such as shopping for clothes or cinema

 – 20% is allocated for the future—life insurance, saving both for retirement and for emergencies, paying off debt, etc.

This simple to comprehend formula offers you a great framework to manage your personal finances.


One of the most popular methods of “making money” in the past was simply putting it into a savings account. Nowadays, saving includes many diverse and complex methods such as: investment funds, pension accounts/retirement plans, crypto wallets, deposit accounts and many others.


The basic definition says that investing is committing money to a specific goal in order to earn a financial return.
Fully aligned with the idea of tracking your personal finance, investing basically means that you decide how much money to invest in order to make more money and achieve your financial goals.

Retirement planning

Retirement planning involves the process of deciding what your retirement plans and goals are and how they can be achieved.
Some might disagree, but it’s never too early to start thinking and take actions about your retirement, estimating expenses and saving and identifying different sources of retirement income.

Estate planning

During their lifetime, most people are too busy or do not think about what will happen to their assets, for which they have worked so hard. Once you have accumulated personal wealth however, it is highly recommended to start thinking about how to protect your assets – and estate planning exists precisely for that purpose.


Or more specifically – life insurance. It’s an essential part of your personal financial plan, not only a peace of mind to you and your loved ones. In fact, life insurance is a great product that meets many of the objectives of personal finance.


Everybody wants a home. Often people cannot or don’t want to pay in cash and get a mortgage. Like all other aspects of personal finance, you need to have a plan on what your goals are and how your financial flows are allocated when determining the size and duration of the mortgage you are considering.


Whether we like it or not, taxes are part of our everyday life, and tax planning is a very important part of our personal finance.

The basic tax types that you should pay attention to are:

  1. Taxes on what you earn – income taxes, payroll taxes, capital gains taxes
  2. Taxes on what you buy – sales taxes, excise taxes, VAT (Value-Added Taxes)
  3. Taxes on things you own – property taxes, TPP (Tangible Personal Property Taxes), estate and inheritance taxes

These are the most widespread personal finance components, but don’t forget – all of them matter.


Why do you need to track them?

Find ways to save money and invest more

Having a clear picture of how much you earn and how much you spend is the basic step to becoming a financially mindful person. To save money does not always mean living a frugal life. Saving money sometimes means earning more than you spend and invest.

Keep your assets organized

The most difficult part is to catalog and organize your assets. Once you do, it’s easier to keep them organized. Basically disorganized assets can easily be lost, forgotten or have their fate left to chance.

Track your financial progress

Keeping your assets organized helps you track your financial progress. If you follow the budgeting method 50/30/20, or another financial framework, you can get a snapshot of your financials easily and on a regular basis.

Maintain financial control

Tracking your finances and financial progress in practice leads to excellent financial control. Control is not always in our hands really, but when we have a complete and clear picture of our finances, we can take sound decisions in order to support positive trends or prevent negative effects.

Protect your assets

Cataloging your assets is the first step of protecting your them, and also – the most important one. Each of us has heard horrifying stories about unforeseen events with people who have left their loved ones in ignorance of their assets.


How to keep track of your personal finances?

Our advice on how to keep track of your personal finances can be summarized in the following top 5 steps:

  1. Make a list of all your assets and credentials: bank accounts, trading platforms, crypto wallets, etc.
  2. Dedicate a time and place to revise and update them
  3. Create an event calendar, consisting of all the important dates, such as: stock options vestings, mortgage payments, etc.
  4. Sign up for an asset protection service with digital inheritance
  5. Don’t forget to account for irregular financial transactions and events.


The professional tracking

When it comes to professional tracking, a recommended choice is to use a personal finance software. There are many different solutions on the market, but everything depends on your needs.

The best way of tracking your personal finances is to use one of the top apps on the market. A secure web-based app, which can guide you through the depths of your finances and help you protect your assets and ensure they’ll be inherited by your family.


Ana Mineva
Co-founder of DGLegacy®, the digital legacy planning and inheritance app that protects your assets and secures your family when it matters the most. On a mission to build a better tomorrow for you and your loved ones!