How to Keep Track of Personal Spending


Do you hate balancing your checkbook because you never have enough cash? Well, you’re not alone. Many people come up short each month, which makes it difficult to pay essential bills, such as rent, mortgage, utilities and loans.

Insufficient income can contribute to cash flow problems; but sometimes, this problem is a direct result of poor budgeting and overspending. Fortunately, there’s a simple solution to this issue. The key is keeping track of personal spending to make sure there’s enough in your bank account to cover expenses.

1. Keep receipts 

To keep track of spending, start by keeping copies of all receipts throughout the week or month. If you don’t want to deal with the extra paper, another approach is keeping a small notebook with you. For every purchase from a cup of coffee to groceries, quickly jot down how much you spend. You can also use a Notes app on your smart phone to jot down expenses, or track expenses using a personal finance app, such as Expensify, Mint or MoneyWise

2. Budget and use the envelope method

If you have a lot of monthly expenses, keeping track of spending can be difficult. To improve your tracking system, use the envelope system for certain expenses, such as groceries, gas, entertainment and miscellaneous spending. After you get paid, deposit funds into a checking account to cover fixed bills. An example of fixed bills include:

  • mortgage/rent
  • utilities
  • insurances
  • auto loans
  • credit card payments
  • student loans, etc.

For your other monthly expenses (also called variable expenses), designate an envelope for each spending category. For example, you might have one envelope for groceries and another envelope for gasoline. First, determine how much to spend in each of these categories, and then deposit the appropriate amount of cash into each envelope. With this method, you spend only what you place in each envelope, which can reduce overspending.

3. Only use one or two main credit cards

If you shop with a credit card on a regular basis, you might lose track of spending. To make this easier, only use one or two credit cards. Continue to keep receipts for all credit card purchases. This way, you aren’t shocked when a bill arrives.

4. Download your banks app to your smart phone

Checking your online account at least once a day is an excellent way to track your spending. Throughout the day or week, you might swipe your credit card or debit card several times, and then forget about a transaction. If you regularly check your bank or credit card accounts online, it’ll be easier to keep a record of how much you’re spending. You can sign into your bank’s website to access your information, or download the app to your smartphone or mobile device. After signing up for online account management you can set up alerts to receive an email notification when your balance drops below a certain threshold. 

5. Anticipate future expenses and plan accordingly

Even if you have a foolproof budget for the month, unexpected expenses will arise. You might have a car repair, or you might have to buy a gift for someone. Therefore, plan for unexpected expenses so you’re not caught off guard. Each paycheck, deposit a small amount into an envelope designated for incidentals. This money adds up quickly and lets you cover unexpected expenses without dipping into your savings account.

See also: Financial Habits to Cultivate this Year

If you’re constantly overspending or never have enough income to cover your bills, it’s time to make adjustments. Only you can change your financial situation. And sometimes, improving your finances is simply a matter of keeping track of where your money goes.