How to Track Your Spending (Without It Being Dreadful)
So, I’ve written a blog post about the benefits of budgeting. (If you’re interested in first seeing what that’s all about, click here). In it, I explained that a part of successful budgeting is tracking your spending in order to ensure that you’re respecting the budget you created for yourself.
Now, raise your hand if the idea of having to track all your spending sounds obnoxious to you. 🖐 Or maybe it doesn’t, and you clicked on this blog post just because you’d like to know your options for how to go about it. Well, both parties are welcome here!
If tracking your spending feels burdensome, you run the risk of not sticking to it. And maintaining your budget doesn’t work very well if you don’t have an accurate account of how you’re spending your money. So, it’s important to figure out a strategy for tracking your spending in a way that is as easy and efficient as possible for you.
Let’s talk about how to do that.
Strategies for Tracking Your Spending
Here are 3 possible strategies for tracking your spending. I’m not listing these in any particular order. No one strategy is better than another. It’s all about what works for you.
Strategy #1: Real-Time Tracking
One option is to track each money transaction you have right after it happens. When you spend on anything or when your account gets charged for something, you enter that transaction on your budgeting app or in your budgeting notebook immediately.
At first, this might seem tedious, but take my word for it. It doesn’t take long before your brain starts to automatically make the association that something just happened involving money, so it’s time to open that budgeting app or notebook and record it. Just bought a cup of coffee? Track it in the budget!
This is the strategy my husband and I use. By about a week into doing it, there were times when I found myself opening up our budgeting app without even realizing it and entering in our spending as it was happening.
And if you’re using a budgeting app, it literally takes seconds to enter in a transaction. Quick and easy!
Strategy #2: Review and Track Your Spending Daily
If you’re rolling your eyes 🙄 at the idea of tracking everything in the moment, no worries! Maybe this second strategy is a little more your steez. Throughout the day, you spend and move on. Then, either at night before you go to bed or the next morning before you start a new day, you take just a few minutes to review your spending.
If you spent on a debit card or have payments that come out of your bank account, then log in and review your checking account. If you spent using a credit card, check your credit card statement. If you spent cash, check your receipts.
The most important thing with this strategy is to make sure you always have a paper trail to refer to in order to track your spending later. If you’re doing cash spending, make sure to always get a receipt and make sure you hold onto it until you review your daily spending.
As you check your accounts and receipts, enter those transactions in your budgeting app or notebook. All in all, this strategy should only take you about 5 minutes each day.
Strategy #3: Review and Track Your Spending Weekly
Okay, so maybe you’re someone who feels like even having to track your spending daily is more often than you’d like. That’s fine too! You might prefer to track your spending on a weekly basis.
This strategy works the same way as tracking your spending on a daily basis. It just doesn’t require doing it as frequently. At the end of the week, review your bank and/or credit card accounts as well as any receipts from cash transactions. For consistency and accuracy purposes, it should be the same day each week. As you review these things, enter the transactions in your budgeting app or notebook.
As you might have guessed, the other major difference between weekly tracking and daily tracking is that weekly tracking is going to take a little more of your time. But again, once you get into a groove with it, it won’t take too much time. You can probably expect weekly tracking to take about 15 minutes. But hey...15 minutes just once a week ain’t bad in my book!
Warning:
I don’t suggest delaying your tracking for any longer than a week. When you let too much time go by between spending and recording it, you run the risk of accidentally going over your budget.
Let’s say you’ve budgeted $400 for food. The last time you reviewed and entered your food spending, you had $150 left to spend. If you don’t check and enter your transactions again for another 2 weeks, for example, you might not realize (until it’s too late) that you spent more than the $150 that was left in the food budget.
Not So Much a Warning, but a Word to the Wise…
Remember, spending does not only include the times when you’re actively pulling out a card or cash to pay for something. It also includes transactions where you’re being billed for things like cell phone service, streaming subscriptions, gym membership, life insurance, etc.
If you forget to include these transactions as a part of your spending, you might make the mistake of thinking you have more money left to spend than you actually do. The way to avoid overspending is to make sure that ALL transactions are accounted for.
Need help with budgeting?
Schedule a free strategy session to get started improving your personal finances.
Conclusion
Tracking your spending is an important part of budgeting and being in control of your money. In order to track your spending accurately, you should be tracking all of your transactions.
The goal is to track your transactions in a way that feels easy and efficient for you. It doesn’t need to be an unpleasant or overwhelming task.
Fortunately, there are a few options for how to track your spending. You can do so in real-time, daily, or weekly. You choose the strategy that’s going to be the most positive and sustainable method for you!
Which strategy do you use? Is there a different approach that you’ve found works for you? Share in the comments below!
Subscribe
Want quick, easy, FREE money advice — straight from a financial coach — that can improve your finances, week after week?
Sign up for my newsletter, and get ready to use your money to live your best life!
