Tracking your spending can be done in several ways. You may choose to use one method or a combination of methods.
Receipt: Save all receipts and put in one location. If you don’t have a receipt for a purchase (i.e., vending machine), write the amount on a piece of paper and add to your other receipts. Each week organize the receipts in general categories such as food, clothing, personal care, etc. Add up the totals in each category, and record the amounts for each in a notebook, account book, etc.
Calendar: Write income on the calendar when you receive it. Record purchases regularly. Write when bills are due on your calendar, and mark them off when they are paid.
NOTE: You may want to write “pay credit card bill” on your calendar at least 7 to 10 days prior to the due date to make sure you do not pay a late payment fee in case it does not arrive at the creditor on time.
Envelope: If you primarily use cash to pay for expenses, the envelope system may work well for you. Write a budget category on each envelope and the amount you plan to spend. Divide your money into envelopes for each budget category. As you need to pay for something, use the money in the envelope for that category. Write the amount spent on the envelope. Review your spending, and make adjustments as needed in the amount in each envelope for next month’s expenditures.
Checkbook: Record each check you write in your checkbook register. Be sure to include a description of what was purchased. Keep a running total with each check written. Balance your checkbook each month. Compare the checkbook register with your bank statement each month to be sure neither you nor the bank has made an error.
Computer programs: Use spreadsheets or financial software to track your spending on the computer. Benefits of computer programs include the ability to keep track of tax deductible items, write checks, and create reports.
Other resources on tracking your spending are available at this site:
“Using a Check Register to Track Your Expenses,” Montana State University Extension, http://www.montana.edu/wwwpb/pubs/mt8703.pdf
We would like your feedback on this Personal Finance Frequently Asked Question.
