Today, it's really easy to whip out your credit card or swipe your phone to pay for all kinds of stuff. In fact, it's so easy that many of us spend money without really thinking about it or pausing to add up all the little things we buy during the course of the day.

Unfortunately, if you're not paying attention to your purchases, you could spend too much without realizing it. If you aren't spending mindfully, it's also likely you're buying things with your hard-earned cash that you don't really need.

You don't want to jeopardize your financial goals or get a poor bang for your buck because of your casual spending. And you don't have to if you track your spending to see where your money is going.

Couple looking at financial paperwork in dismay.

Image source: Getty Images.

Why should you track your spending?

Millions of Americans can't handle a $400 unplanned expense, and almost half are living paycheck to paycheck. For some, the lack of savings is because their incomes really are too low. But for many others, the problem is their spending, not the size of their paycheck. 

Unfortunately, it's really hard to know where you're overspending if you don't actually keep track. Underestimating what you spend on is common, and dropping a few dollars here and there may seem trivial without looking at the big picture. If you actually take the time to see where every dollar is going, though, you may find you're wasting way more cash than you thought and that all those little splurges add up to big bucks. 

Tracking spending is also important, both to make a budget and to make sure you're successfully living on it once you've created it. Unless you start with an idea of where your money is going, you may be unreasonable in the amounts you allocate to each expense and could end up creating a budget that's impossible to follow. 

How do you track your spending?

The good news is, tracking your spending is simple. You can do it using apps such as Mint, which allows you to link your checking and credit card accounts, categorize transactions, and see reports on what you spend. You can also do it the old-fashioned way by writing down everything you spend and transferring the entries onto a spreadsheet at the end of each day. 

How long should you track your spending?

Tracking your spending over a month is good for a start if you aim to make a budget or identify problematic patterns. You'll likely miss out on periodic expenses if you keep track for such a short time, though, so it can also be a good idea to look back at several months of credit card statements to identify payments you make every two months or semiannually, or things you splurge on such as holidays or birthdays. You can then make a budget that takes both daily and occasional spending into account. 

If you want to see if you're sticking to your budget or if you're having trouble keeping your splurges under control and being responsible with your money, you may want to keep track for even longer. In fact, some people find that keeping track indefinitely helps them avoid wasting their cash since it makes them more conscious of where their money is going. 

See where your money goes to be sure you're spending it right

While tracking your spending may seem like a drag, you owe it to yourself to make sure you're actually using your money in a way that makes sense for your goals and desires. Tracking your spending doesn't have to be done with the aim of eliminating everything fun from your budget, but it can definitely shed light on what you're doing with your money and what changes you may want to make.

Once you've evaluated where your cash is going, you can often get much better value from it. And who doesn't want to get the best bang for their hard-earned bucks?