Record is the second and essential tool in controlling the plan and for keeping an account of total planned expenditure and the actual expenditure made. Thus it helps to keep a financial record of expenditure for future plans. Record keeping is the written record of the exact expenditure made during the implementation period of the financial spending plan. For this, a record sheet is developed for each category of the financial spending plan and in this sheet, the amount allotted and the amount of money spent on these items are recorded
Some of the advantages of record keeping by families are:
The record of actual expenditure serve many functions such as the money spent and the corresponding date, the total monthly expenditure, which can be compared with the spending plan throughout its implementation.
Continuously checking the actual expenditures against the anticipated expenditure clearly indicates as and when the adjustments must be made to avoid excessive expenditure prior to the close of the spending period. It will also provide an evaluating feedback at the termination point of spending time
Record of actual money spent can assist in identifying the areas where the anticipated spending was too high or too low. This becomes a source of input for future spending plan.
Record keeping provides the data as well as a thorough analysis of actual expenditure. We can also identify our buying weaknesses. There will be indicators of where and how our expenditure reductions can be made. This data will also demonstrate our present spending pattern.
Records will also point out the possible areas where reduction can be made in spending, i.e. if and when necessary.
Unless accurate records are kept separately for actual money expenditure within each category, the data needed for future spending plan would be missing and this information is vital for future planning, and a proof for the successful implementation of the present plan.
Thus record keeping is an important tool used in money management for maintaining and checking the spending practices of the family. The spending plan serves as guidelines for monetary outlay of the family funds, but by controlling this flow by spending and recording according to the established plan, it can be said that the information stored in the records is not only vital to the present plan but also for future financial management.
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