I’m not going to lie – I absolutely hate the process of tracking my expenses. If you don’t keep up with it on a daily basis it can be so daunting to get caught back up.
But the end results of tracking your expenses? Amazing.
You might think you’re wonderful at keeping your spending to a minimum but when you look back at every purchase you’ve made, you realize just how much money you’re flushing down the toilet.
To get an accurate, realistic budget (that you’ll actually stick with!) you do need to track your expenses. It’s the only way you can tell, for sure, where your money is going.
I’ll be tracking my expenses over the next thirty days so that I can better budget my money. I hope you’ll be joining me so that you can have a realistic working budget by next month too.
Here are three tips for getting started.
# 1 Record Your Expenses at the Same Time Everyday
The easiest way to a) stick to this and b) to not get backed up is to sit down and record your expenses at the same time every day.
For me this works the best after I put my kids to bed but before I start working. Figure out what time works best for you and take 5-10 minutes to sit down and record your purchases each day.
# 2 Break Your Purchases Down Into Categories
If you have a receipt for Kroger and you bought $90 worth of groceries and $20 worth of books for yourself don’t record everything under groceries.
Record $90 worth of groceries and $20 worth of books – not $110 worth of groceries. (On a side note if your budget category “groceries” includes personal hygiene products, cleaners, etc. then record them all in the grocery category.)
You need to be detailed so that when you reflect back on the month you’ve got an honest assessment of where your money is going.
# 3 Use the Same Method to Record Your Expenses
If you’re going to use an Excel sheet then always use the Excel sheet. If you’re going to use a notebook then always use a notebook. If you’re going to use Mint then always use Mint. You need all of your data in one place so that it’s easy to analyze.
Free Printable Expense Tracker
I’ll be using this printable expense tracker. I am definitely a paper and pen kind of girl. I’d much rather physically write everything out – but that’s just me! If you like it you’re more than welcome to download and use it.
This printable has four columns – date, expense, amount, and category. The date and amount are self-explanatory. The expense column is to record where you made the purchase and the category is to write down the budget category that the expense falls into. At the end of the month you’ll be able to tally everything up and see which budget categories you need to work on.
Also note that most people will need to use two of these per month. I’m using one for my fixed expenses (everything I write a check for or that gets withdrawn out of my bank account) and the other for variable spending (grocery shopping, etc.)
If you prefer a computer or online tracker here are some options:
Mint.com – Mint is a free online program that will track all of your expense for you. You simply link the bank and credit card accounts you spend from. Mint will then pull that data and organize your spending into categories for you. If you use a lot of cash you can go back in and manually input your purchases.
Excel Spreadsheets – You should be able to search the templates in Microsoft Excel to find an expense tracker. If not you can find one here, here, or here. (If you don’t have Microsoft Excel use Google Docs, it’s free.)
As daunting as tracking your expense can seem to be it’s also very revealing. The numbers don’t lie! Make a commitment to track your spend for thirty days so that you can come up with an honest, realistic budget that you’ll actually stick to.
How do you prefer to track your expenses?
I’ve done this for 3 years and the results are great. Sure, it’s annoying to have to track your expenses, but it allows you to better understand your cashflow and make less mistakes.
It can definitely be a pain but it is also so revealing! I might think I’m doing awesome until I track my expenses then I see where my money is really going and it’s a wake up call.
My budget has been pretty off lately. I’ve just kinda pushed it to the side to finish later, that was 2 months ago. Not smart… I’m going to try this and see if I can get it back on track. Thanks for the printable!
You’re welcome. It is so easy to push the budget to the side. I feel like I’ve done that the past couple months too.
I think once you continue to track your expense it becomes a habit. I’m not saying is a habit you will love to do, but once you start controlling your money it gets much interesting.
Yes, you can make anything a habit if you commit to doing it enough. It’s just getting through that first month.
I’ve been using YNAB for the last five or six months and it’s worked really well for me — I think it’s mostly because I can enter stuff on my phone as it happens so I don’t randomly forget stuff. I do, however, do a cash draw for misc, and I don’t track where that goes; I might try tracking that sometime this year just for fun.
I’ve heard good things about YNAB but never tried it. Paper and pen has always worked the best for me 🙂
If I do this, I might find out that I am a moron!
Does anyone else feel this way ? Like, I don’t want to know in case it’s “bad”. What an unhelpfull script to have in my head!
: )
~ C
You need to read “Your Money or Your Life” 🙂 Tracking your expenses is a no shame no blame kind of thing! We all make those mistakes you’re thinking about. BUT if we want to make sure our spending lines up with our values we have to assess this stuff. Approach it from a business point of view. No shame, no blame just an honest assessment. No negative self talk or beating yourself up!!
I also should admit I spend my money on plenty of things I’m not proud of. But once I see it on paper it makes me want to stop!
I’ve been tracking my expenses from 2011. At first I told myself I would do it for 30 days to see if I could stick with it. After the 30 days I liked so decided to keep going until I wanted to stop then I just liked it so much I kept going. The first year it was a real eye opener! My #1 thing I spend money is food. It is also good to go back and see what did I pay for in previous years.
great advice with useful information