Has this ever happened to you? You get paid, you see the money hit your bank account, and then all of a sudden it’s gone and you’re left wondering where it went. I used to experience that all the time before I took control of my spending. I discovered how to make sure that never happens to me again and I’m going to share this surefire strategy that always works with you in this post by teaching you how to track expenses.
HOW TO TRACK EXPENSES
Tracking your expenses is a quick and easy way to take control of your money. In this post I’m going to explain exactly how to track expenses so that you can save more money.
WHY SHOULD I TRACK MY EXPENSES?
Tracking your expenses has many benefits but I’m going to focus on the two main ones in this post.
The first benefit is that if you track your expenses you will always know where your money is going. This is super important because if you don’t know what you’re spending, you can’t control it.
You might be shocked when you figure out how much money is actually slipping through your fingers every day.
The second major benefit of tracking your expenses is that it’s actually the first step to lowering them!
When you know exactly what you’re spending you can take control and start cutting back.
And do you know the amazing side-effect of lowering your expenses?
You get to actually keep more money!
I hope I’ve convinced you that tracking your expenses is worth it. Now let me explain how to get started.
HOW CAN I TRACK MY EXPENSES?
So, tracking your expenses is super simple. You just need to record every single time you pull out your credit or debit card, spend cash or write a check.
The key is that you need to track every single expense!
If you just track some of your expenses, it’s not going to get you anywhere.
To be most effective, you need to record the date of the expense, what the expense was and where you purchased it (for example, Groceries – Trader Joe’s) and how much the expense cost.
The tool you use to track them totally depends on your personal preference.
Pencil & Paper
I prefer to see things written out on on actual paper. For the past few months I’ve been using the printable expenses tracker that can be found in my expense cutting workbook.
I think my printable expense tracker is really the easiest pencil and paper option because it has a column for each piece of information that you need.
If you aren’t into pretty printables, you could definitely use a little notebook instead.
I’d recommend that you pick up a small spiral bound one from the dollar store and stick a pencil through the spiral. If you’re going to use a notebook, the best place you can keep it is in your purse (or your car if you don’t carry a purse) so you always have it with you when you’re spending money.
On your phone
You could also track your expenses on your phone. You could do in a note app (I use the note app for so many things- I love it!) or if you don’t have an iPhone you can use Evernote.
There are also a TON of apps out there that you can use to track your expenses.
Most of them cost extra to use if you want to link them to your bank account or credit accounts (which you really don’t have to do if you’re just diligent about keeping track of things, by the way).
I think good old Mint.com is a safe bet if you’re looking for an app.
It’s free and you can access it on your actual computer as well as your phone. Forbes has a longer list of apps you can use to track expenses here.
One word of warning about using any kind of tracker that’s linked with your accounts:
Make sure you manually track any purchase that you make with cash!
Back in the days when I wasn’t so great with money I considered the purchases I made with cash to be free because they weren’t coming out of my account.
Unfortunately, it does not work that way. Track those cash purchases too!
On a spreadsheet
I am not a spreadsheet person, but if you are, go for it!
If you are going to use a spreadsheet to track your expenses, you have to be super careful to make sure you don’t miss any.
Set aside a time every day or every few days to add new expenses to your spreadsheet.
WHEN SHOULD I TRACK MY EXPENSES
It’s crucial that you record every dollar you spend right as you are spending it.
It’s hard to remember where our money went after it’s gone, so the best time to track your costs is right as you are spending the money.
If you’re making a purchase in a store, record it right as you’re paying for it, or at the least, right as you get back into your car.
If you’re making an online purchase or paying a bill record the expense right as you are making your payment.
I’m a procrastinator by nature, and I’ve learned the hard way that if you put off tracking your expenses, they will not get tracked!
HOW DOES THIS LEAD TO SAVING MONEY?
Tracking your expenses is the first step to lowering your expenses. And lower expenses means more money you get to keep!
After you’ve tracked your expenses for a month or two, you’re ready to start cutting your expenses!
My FREE Expense Cutting Workbook will walk you step-by-step through the process of cutting your expenses. This workbook shows you exactly how you can use the information you’ve collected to save money.
START TRACKING YOUR EXPENSES
Now it’s time to get started tracking your expenses!
Remember that it’s super important for you to record every single expense because just tracking some of them isn’t going to get you anywhere.
And record your purchases as you’re making them, because it isn’t easy to remember later. Decide on the tool that’s right for you and start tracking your expenses today!
Psst… Want to save even more? Hop on my email list here. It’s my favorite place to give you money saving tips and insights that I just don’t share anywhere else. Plus you’ll get lots of free financial tools just for signing up.