Best Ways to Track Your Expenses (Why You Must Take Charge Now)

Did you know that neglecting to track your expenses is similar to leaving the doors of your home wide open, allowing anyone to come and go as they please? It's an open invitation to financial challenges and uncertainty.

Understanding where your money goes is essential for making sound decisions about budgeting, saving, and planning for the future. If you're like most people, you might not have a precise monthly spending figure. Failure to track your expenses can lead to feelings of financial strain, stress, and anxiety, pushing you to live paycheck to paycheck. These financial pressures can hinder your ability to concentrate on your job and family, causing constant worry about meeting basic needs like groceries, medicine, and clothing. As bills arrive daily, you could find yourself trapped in a cycle of living paycheck to paycheck, with debt looming large and unending financial stress. This situation can erode your self-confidence and impact your relationships, exhausting your mental energy with constant financial concerns.

Now that you understand the potential consequences of not tracking your spending, let's refocus, gain control, and set a plan to monitor your expenses. Expense tracking is your key to uncovering unnecessary or unwise spending habits, enabling you to make adjustments and channel your resources toward achieving your financial goals.

“If you don’t get serious about your money, you will never have serious money.” – Grant Cardone

Here are few tips to help you track your spending:

1. Refocus - Refocus means changing the outlook or direction of your thoughts. Get a clear picture of your income, expenses, values and goals.
2. Gain control - This includes becoming aware of your money habits that are not helpful. You want to practice positive habits and thoughts. So, be patient with yourself as you learn new positive habits and cancel costs you don’t need. This will help reduce your expenses.
3. Make a spending plan - A spending plan is not to prevent you from spending. It is to paint a picture of your spending behavior.
4. Spend less - Avoid impulsive spending by leaving credit and debit cards at home. Only carry the amount of cash you intend to spend.
5. Separate needs from wants - Look at all your spending and highlight what are 'needs' - items you need to live. The ones left over are 'wants'. These ‘wants’ are the things you could cut back on or live without for a while. Note that it is a good habit to add ‘wants’ gradually to your spending plan.
6. Expense tracker app - Expense apps help you keep an eye on your spending as you go along. Some of these apps are really focused on tracking your spending, so they give you a good idea of how you spend your money. Others are more about making a budget. These expense tracker apps can record all your spending automatically, while some need you to put in your spending details manually. So, if you want an expense app, there's definitely one out there for you.
7. Talk to a close family member or friend - Chances are, your family and friends are also worried about money. Having a chat with them can be a way to help each other out and find solutions. Here's how to have a good talk: Pay attention when they're talking, decide what you want to talk about and how long it should last, pick a quiet place with no distractions, and be polite in how you talk to each other.
8. Use an envelope system - This is a cash-based method of controlling spending. It requires creating an envelope for each category of your expenses (there are even apps that can do this). This method allows you to place cash in envelopes for itemized monthly spending. To start, write the name and average cost per month of a bill on the front of an envelope. When you get paid, put the amount in cash for that bill in its respective envelope. When the bill is due, take the cash out to pay for the bill. You can also combine this system with an electronic system when cash payments are not convenient.
9. Use a spreadsheet - Create your spreadsheets in Excel or Google Docs and track your expenses each month. This requires logging in your expenses once per week or once per month. You can also include income and saving goals in your spreadsheet. Remember that spreadsheet systems need more discipline than automated systems. To get you started, you can look for free online budget templates. As you get into the routine, make a calendar event or reminder to build the habit into your day.
10. Be consistent - The more consistent you are with your tracking, the more accurate your data will be.
11. Don't be afraid to adjust your budget - As your spending habits change, you may need to adjust your budget.
12. Don't give up -Tracking your expenses can be a challenge, but it is worth it in the long run.

Keep in mind that keeping an eye on your spending is a fantastic way to make your money habits better. Remember to keep a record of everything you spend. These tips might stop you from feeling like you have no money, and assist you in saving, getting rid of debts, and reaching your money goals. If you're not already keeping track of your expenses, I recommend you begin doing so today.

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About the Author

Bobby Clark (Founder - Clark on Money Coaching Services)

Bobby is the founder of Clark on Money Coaching Services, a firm that offers virtual services and specializes in helping medical professionals who feel stuck financially find simple solutions to their frustrations while providing solid guidance toward goal achievement. He earned a CFP Certification Professional Education from the College for Financial Planning. He is a member of the Accountable Coach Network and the Association of Financial Counseling and Planning Education organizations. In 2021 he received the designation of Global Presence Ambassador for his contribution to Financial Literacy education.