Expense Management 

Expense management refers to the process of planning, controlling, and monitoring expenses to ensure they are aligned with financial capabilities and goals. Expense management is an 'active' task involving tracking and categorizing expenses, analyzing spending patterns, and making informed decisions about cash allocation to different components of your budget.

The How-to for managing expenses

One of the most basic financial principles is that outflows can never exceed inflows. You cannot spend more than you make. Our goal at OFF is to help you become more efficient with your money.  We use a few techniques to manage expenses.

• Track your expenses: This is a mundane task, but it is necessary. You can do this manually with pen and paper, use an app, or even a spreadsheet. 

• Weigh each expense: Write a "1", "2", or "3" next to each bucket. "1" is a necessity such as rent and insurance; "2" goes next to items that are important but not necessary; and "3" goes next to things we can easily live without. Have discipline for this step. 

• Bucket your expenses: Take every expense and categorize them into a bucket. The OFF budgeting tool provides you with various buckets.

•  Add up the score for each bucket: The buckets with the highest scores are the ones we start to scrutinize first. Every bucket and every expense is scrutinized. For example, insurance should receive a score of "1." Car insurance is a necessity, but overpaying for car insurance is not. 

The So-What...make every dollar count. Tracking expenses is crucial because it provides valuable insights into your spending habits. By understanding where your money is being spent, you can identify potential areas for cost reduction, freeing up money to help you hit your financial goals.