Well friends, in case you missed my posts about how much I spent on my car, my dog and my blog over the past year, I’ve been tracking my spending for just over one full calendar year now, and boy has it been an interesting ride. Instead of digging into yet another category of spending from this past year’s treasure trove of data, I want to take a step back and share everything I learned from tracking my spending – so far, anyways.
Let’s all settle in, because I have learned some shit, let me tell you. This one’s a long one – maybe grab a coffee? I’ll wait.
You Will Want To Quit
Really makes you want to learn more as a first lesson, right? Like, this sounds like a great opening, I should think about doing this!
But let me tell you a story about the first few months that I was tracking my spending.
Without fail, the first few days were so exciting. New, fresh spreadsheets, with only a few fixed expenses listed on them, and visions of coming in under budget dancing in my head.
There’s nothing like feeling like you’re in control to make the universe eff up your plans.
By mid-month, with an accurate view of just how much I had really spent, and a good understanding of what I still had to spend money on that month, I would be so discouraged. There were times, especially in the first few months, where I would casually just not update the spreadsheet for days (ok, weeks) at a time, because if I didn’t see it, it wasn’t happening… right?
Wrong. Obviously .
So there were several months where I went back into my spreadsheet with mere days left in the month to reconcile my spending and add all the purchases I casually ignored. The funniest part was, it was never that bad when I finally finished it. I’ve learned that my months tend to be heavily front-loaded with spending, especially since I add in fixed expenses right away (like my car insurance payment on the 26th of the month, and my grocery budget. Ain’t nobody got time for running out of food money because you bought too many dog toys.)
Your Expenses Are Probably More Variable Than You Think
The other big reason that I found it challenging to stick with tracking my spending when I got start was that man oh man , I did not see some of my variable expenses coming. Between my $315 annual pet insurance premium, to my $458 traffic ticket, to the first Christmas where I was actually aware of how much I spent, fall just happens to be a spendy season for me.
I was so optimistic going into it that I could save half my income, and yet the hits just kept on coming, putting that goal squarely out of reach. This year, I’m much more informed of what my big monthly expenses are (minus that ticket that I won’t get again because I definitely learned my lesson, thankyouverymuch) and I can plan for them.
Sure, planning for them might just mean not buying an unnecessary third fall coat because I know I have to rustproof my car this month, but that totally counts .
You Need to Do It For The Long Term
Since I kept missing my goal of saving half my income, I got pretty discouraged, and fell into a monthly pattern of avoiding my spreadsheet for weeks at a time, only to go back and enter everything in at the end of the month. While this isn’t ideal, I have to say I’m really, really glad I stuck with it, because I now have an accurate, complete picture of what I spent money on over the course of the year.
This data – the long term stuff, not a single month – is what really matters when it comes to planning my spending and hitting my goals. A single month might have a huge number of variable or unexpected expenses, but it’s balanced out by the months where you spend less than you expected – and if you stop tracking after a month, you might just think you’re an incorrigible spender and call it a day.
Keep tracking! It’s worth it.
This is Really All About Feelings
The hardest part of tracking your spending is never going to be the act of putting numbers into a spreadsheet. Seriously, I don’t care how long you take to input your numbers every day, or week, or month. The hardest part of this whole deal is going to be the feelings.
Oh my god the feelings .
I’m talking about feeling like you “can’t afford” to do things you want to do (even if you probably can). And feeling like you shouldn’t spend money on that thing. And then feeling like you really do value spending on that One Thing, but you need to shift your behaviour because you’re spending too much on that Other Thing you don’t care about. And the high of thinking you’re going to hit your goal! Followed quickly by the crushing blow of an unexpected expense coming in and straight-up ruining your perfect spending month.
There are feelings galore up in here, that you get to have to confront when you’re looking this closely at your spending – especially if you have a money goal in mind, like my goal to save half my income.
Sometimes, those feelings will drive you to avoid your tracking project for weeks on end, or take a few months off. That’s OK. Obviously it’s not ideal, but acknowledging what’s up is the real goal – and of course, being gentle with yourself is kind of a big thing too.
If Everything is On Your Credit Card, You Don’t Need Receipts
For the longest time, paper receipts were my favourite way to keep track of everything. This actually predated tracking my spending, and started as a way for The Boyfriend and I to split our food costs every month. Here’s the thing: I carry one of those tiny wristlet wallets, and trying to shove a grocery receipt into it at the end of the month is like trying to squeeze an NFL player into a Smart Car. It can happen, sure, but it’s no one’s best case scenario.
I’ve started relaxing my all-receipts-all-the-time strategy, and I haven’t missed a single thing in my tracking spreadsheet yet. This is all down to the simple fact that for me, like basically every millennial I know, cash is a total afterthought. I already have a system that keeps track of everything I spend, and it’s called my credit card.
Now, the only times I get receipts are when the balance isn’t going to handily show up on my Tangerine online banking interface.
Manual Tracking is Not “Just Like Mint”
Before I started tracking my spending, I used Mint. Or… more accurately, I hooked Mint up to my bank account and deigned to open the emails they sent me from time to time.
Manually tracking your spending, in my experience, is nothing like Mint. Why not? Because Mint is passive af. I had Mint turned on for years, but never once did it make me adjust my spending, question a purchase, increasing my savings rate or do a single thing to better my finances. It was the functional equivalent of doing nothing at all, plus some data.
But tracking my spending in a more active way, by using my own, albeit simple, spreadsheet, was a game changer. Now that I had to record every purchase, I began actively looking for ways to save money, and I knew that every swipe of my credit card was in the context of how much I had already spent that month – not to mention how much I could spend before ruining any hope of achieving my 50% savings target.
Tracking is Simultaneously a Big Deal and Not That Big a Deal
It’s been a big year – which you know by now if you’ve stuck with me through this monster of a post – and it’s weird to think back on how much has changed, and how much awareness I’ve gained from tracking my spending.
Looking forward, I’ll be honest: I wondered if maybe, this level of tracking was a bit… too much.
Not too much effort, really, because it’s second nature now, but too much in the way that maybe I don’t need to be quite so hardcore about tracking my money. So, when the thought came up, I sat with it for a while.
Maybe I should relax and let things ride a bit? Loosen up?
And then I thought back to how I used to make money decisions.
I distinctly remember signing up for a $200-ish training course with The Dog one month, and basing my “I can afford this” decision solely on the money that was in my bank account at the time. Not on what I still had to buy that month, not on an informed view of my current spending, not against my dearly-held and important savings goals.
Just, “I have the money, let me go spend it.”
That isn’t a perfect example, because I love The Dog more than words, in both the I-can’t-describe-it way and the I-genuinely-do-love-words way. I probably would spend that money again, even knowing what I know now.
But that decision process? Yeah, it stresses me right out to think about it now.
As there are more and more demands on my money, and competing priorities, I can’t even imagine how easy it would be to slip back into the habit of spending money because it’s there, instead of because I had an intentional plan to manage it in line with my values.
Tracking my spending is the one, single, only thing that has helped me make that change. Literally above and beyond any other strategy or tactic to improve my money, tracking my spending manually is it.
The Big One.
The One That Changed Things.
So, shit. I guess this is less a question of relaxing, than it is of realizing that this is my new normal. This isn’t a phase, or a project. I am a human who tracks her spending, and you know what?
If I look at the amount of effort I put in versus the benefits I get out of it, that’s just fine.
Have you ever tracked your spending manually? Did you feel like it made a difference? Or, on the other hand, has an app ever actually changed your behaviour with money? If yes, I want to hear about it!
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Like the true weirdo that I am, I love tracking my spending. I code everything and then type in what it is on a free spending tracker on my phone. Then, at the end of the month, I key it all into our budget (general categories- I don’t relabel all the specifics). My husband is a lot less excited about this. But we both agree that it’s pretty powerful and enlightening. I imagine it’s a lot like keeping a food or fitness journal. The act of coding in the information is a great way to give yourself pause.
Ooooooh, which free spending tracker? (Feel free to move this conversation to Twitter if it’s easier, and if I remember tonight I’ll hassle you there for you it!) And honestly, even given how ambivalent about it I sound in this piece, I love it too. It’s turning into like… a puzzle? I guess is how I would describe it? Like, “How can I make everything fit and optimize this numbers game?” Which oh my god is nerdier than anything I said in the entire post. Hi, my name is Des, and I’m an incorrigible personal finance nerd.
I really like the automatic ways of mint. I tried doing the whole manual entry thing on a free app once but just couldn’t keep it up.
We tracked every expenses for the first few years we were trying to get out of debt and really start saving. Then we tracked certain categories every few months. We automated our investing and set up checking accounts for certain items for a number of years, and that worked well. This year, because we are taking a year off, we are back to tracking every single expense. It’s been great. We use an app on our phone and computer to put in each transaction. It has given me so much good info! As we start to think about what the next season might bring, I is great to know exactly what are expenses really are.
The seasons thing is so true – I used to have a vague idea of when certain things (like new glasses or my annual contact-lens order or my annual rustproofing) would hit, but now that I can easily attach it to a month, it makes balancing everything so much easier. I still get caught into my monthly categorizations a bit too much, in that yes, of course, if I handle an expense one month and take it out of the next, it’s all the same to my net worth, but I do like hitting my monthly numbers, lol. Not the worst habit to be in, but probably not optimal, haha.
I track manually, too, and like you, have been for a little more than a year. I agree with everything in this post – it made the biggest difference! I no longer believe people who don’t track their spending when they try to tell me that they know where their money goes…
OH MY GOD YES! I did a half-rant post about that last year, but when people scoff at my $600 food budget or my dog spending, I just want to casually ask if they track their spending – because if not, I can almost guarantee they spend closer to what I spend than they think they do! Things are expensive, yo. Knowledge is power and all of that.
We have used Mint for a long time, and while we look at it all the time so it does some behavior modification for us, I’ve noticed it’s only good for broad-scale things. By that I mean, keeping us from overspending in any one category. (Ah, we can’t eat out today, because we don’t have any eating out money.)
What it doesn’t really do is get us to question each individual purchase, which is why, for my spending money, I’ve started logging what I buy in a little notebook. (I know I will inevitably write a post about this.) It’s already worked in some ways–I can’t “sneak” Starbucks because while it would just be a dip in the aggregate total on Mint, in this notebook it sits there starting at me. STARBUCKS. I’d have to write it in. Ugh. Serious motivation.
Oh I love that idea for your personal spending! A lot of people have brought up using their phone to track as well, which is brilliant and a habit I’d like to build (although my current system works, so I don’t have tooooo much incentive to actually switch it up, haha.) Based on that, I totally get your feelings about Mint – if it works, don’t mess with a good thing! I’m really glad to hear it works for you!
Going on seven years with an Excel spreadsheet (Vertex42 – that site has everything!). I can’t not do it now, it’s like breathing, or more accurately like getting the coffee ready at night so it starts brewing at 6am. It’s habit and a very powerful one that has unquestionably made a difference in our spending and savings.
What is this magical wonderland of spreadsheet templates and how have I lived without it all these years!! Annnnd I’m off to spend my day spreadsheet-ing every aspect of my life.
Ok and see I just assume it was like, a reference website, but after this reaction I went and Googled it and BYE CALLING IN SICK TO WORK TOMORROW TOO MANY SPREADSHEETS. This is so good!
Mmmmmm 6AM coffee… teach me your ways, it would make my 6AM dog walks way more palatable! Hahaha in all seriousness, I agree, it’s a habit just like anything else. I never expected it to become a permanent fixture, but now that it has I really can’t see ever going back!
I used Mint for four years to track my spending, but I also feel like it’s too passive to make a change in spending habits. I check the site every day, but seeing a maxed out grocery budget doesn’t convince me to cut back on that category for the rest of the month. It just makes me feel bad for going over! The spreadsheet idea is intriguing, but how do you handle tracking expenses with your SO? Do you only track your share of common expenses, or do you include all expenses? We are trying out different methods for our household budget to see what sticks, and so far we’ve tracked our spending individually.
Oh man that is such a good question! For right now, the only things we track together are groceries and shared household expenses (cleaning products, laundry detergent, etc.) because of our financial setup – he owns his place, and I rent from him. That keeps a good chunk of our expenses and spending separate, so unfortunately I don’t have many good “how to track things together” tips! Other than if one person likes doing it, they should probably be the spreadsheet master and give the other person as much access or info as they want/need. (Easy for me to say, The Boyfriend has not once in our entire time living together asked to see the record of our grocery spending or questioned the number I told him. I’ve got a running joke that I’ve been quietly stealing pennies from him for years, lol.)
That’s how we’re doing it now, as well. Mostly we trade off who pays at the register, so it’s not a perfect system haha. Thanks so much for sharing! Helps to get different perspectives 🙂
Super interesting! I have never been interested in tracking my spending for extended periods of time because my expenses aren’t very high. However, in the future or once I own a home I can see this being extremely valuable.
Oh man, when Jordann commented about buying a house blowing her spending way out of the norm, I was like “I can believe it.” I already have a running list of “Things To Buy In The New Place” and I feel like tracking my spending is going to be the ONLY voice of reason in the house at that point. If you’re in a good groove month to month, I say stick with what works for you 🙂
I have done the manual tracking thing and the Mint.com thing, and I like them both. I’m actually planning to start tracking my spending again starting in October, after several years of not doing it. I used to track every penny, but at one point I got in such a good groove with my budget that it seemed pointless.
Of course, now that I’ve bought a house, my good groove has gone out the window, which is why I’m going to start tracking every penny again. I’m not sure if I’ll use Mint.com or a spreadsheet, but it HAS to happen.
I 100% believe this, seeing as I have a full list of expenses / purchases / random things to buy when we get a place. I foresee total budget annihilation, and am at least a little happy I’m not the only one who will be thrown out of what was a perfectly good budget groove when buying a place, lol. I hope the transition back to tracking is a smooth one!
I knew before you even said it that you would start “casually forgetting to update the budget” because I’ve had the SAME PROBLEM! I had that problem so bad that my budget got behind and I ended up giving up on the budget for several months. It was that bad. Continuously updating and tracking your spending is indeed the single most important thing that you can do, at least until you’ve gotten things under control and on autopilot.
Thanks for sharing!
Oh and it’s SO casual when you’re doing it too! Like “Oh yeah, I didn’t update it today, but maybe later / tomorrow / never will be a better time.” CASUAL. Hahaha I’m really glad I’m not alone on this! Thank you for commenting!
I’ve been tracking my spending manually for over 12 years now! I started when I was 16 and have never stopped. It is amazing having all that data. You are on the money about variable expenses! My fixed monthly expenses are $1300/month and I spend in total anywhere from $2000-7000/month. So much variety. I’m working on convincing my husband (!!!) that we should track our joint spending manually 😉
So true! My fixed costs are gloriously low because I’m not a homeowner, coming in around $1200 in total, but then yes, the variation struggle is so real on top of that.
And EEEEEE! Husband! Joint tracking! Love it. If you find a good system for joint tracking, let me know!
The nice perk about manually tracking is that it’s easier to go back and reference your old data, spot trends and see what has changed over the years. I used to use LearnVest, but I switched to Mint and lost all that data. I supposed I could have archived it in some form, but that was way too much work.
I feel like 2010 was the year that i did the tracking and it’s fun to see my notes “reimbursement from ____” (Some chick I dated once who I wouldn’t otherwise even remember)
I definitely spent less when I manually tracked, but i also devoted far more time to the spend monitoring. Mint is good enough for me, for now! 🙂
That’s my big fear with software – I know I’m too lazy to export the data into a new tool! I’ve heard such good things about YNAB too, but just never got into it since spreadsheets were working so well for me. (See? I’m on team good-enough too!)
We’ve been tracking expenses for almost 5 years. We do everything manually, get receipts then enter the amount in the spreadsheet, even though we use credit cards for most of our purchases. It’s nice to get an overview of where our money went and being able to see a trend and see what we can change over time. h
Receipts were SUCH a good solution for me for so long – even with the credit card there, it was so much easier to just have the rule that I always took + saved a receipt, and then tallied them at the end of the month. It was especially handy when the guilt / overflowing wallet reminded me to go back and update my weeks-neglected spreadsheets, haha.
So, wow, okay, I feel like you were writing AT ME DIRECTLY. Because I am going through literally all of these things right now. I was basically nodding along your entire post, like “yep, that’s me, that one too, annnd this one”. I’m currently sitting at day 30-something of not updating my spending tracker because last month I went over in some areas and have been hating myself ever since. I’m dreading looking at it again. It’s so stressful, UGH. But I agree 100% that it’s worth it and that it’s such an incredibly valuable tool for money management.
I used You Need a Budget for like 6 months but didn’t connect it to my bank accounts, I just tracked manually. Then I decided it worked well, but I didn’t need to pay for something I could do with my own spreadsheets, so I started up again on my own. It’s hugely beneficial, fer sho, because I’ve really cut back on those stupid purchases I don’t place any value on (like Tim Hortons runs, gah) but it’s suuuuch an emotional roller coaster.
You are like a psychic money therapist because you write these incredibly amazing and helpful posts exactly when I need to read them. It freaks me out, but in the best way, because I am so much better for it, haha.
Oh you are too kind, fellow money psychic whose writing is basically preparing me for life as a homeowner, because you are an uncanny mind reader and I’m convinced we’re the same person. Can I also say, SO sad you won’t be at CPFC?! The. Saddest.
And sooooo many hugs on the going over budget and feeling like a butt, because that was basically me all fall last year. It happens and it is 100% OK! Just think of how far ahead you are in comparison to people who don’t even know they’ve gone over budget. Still a rockstar money psychic, so please don’t feel bad!
PREACH about Mint. I went into this year thinking that Mint was going to help me pay off my debt by being in my face about my spending and…nope. For one, Mint is constantly wrong about what category some of my purchases fall into, so I’d have to constantly go back and adjust. Also since I’m paying off so much debt, they’d be like, “You have paid $2000 on Transportation, normally you pay $200.” YES MINT, BE PROUD OF ME, THIS IS A GOOD THING.
End rant. But still, so glad I stumbled across your site. You’ve motivated me to track my spending (since March!) and that’s helped me way more than Mint ever did. I actually look forward to inputting my spending at the beginning of the month (for the past month, which is a bit backwards, I admit) because then I also pay all my bills and front load my spending, like you. Plus I keep a total of my remaining debt next to the bill payment, and it’s so refreshing to see that number go down. Especially when I total it at the end of the month to see how my overall debt repayment is going…Only $7k left til debt free!!!
When I finally pay off my debt, hopefully tracking is just as fun, with me including my saving increase in place of my debt repayment.
That awkward moment when auto fill puts in your last name. #noob #whoops
Hahaha super quick reply until later, but I popped in and edited it for you! Just in case – I know full names + the internet are touchy, and I like the comment and want to keep it! So I figured I’d get your last name off of there just in case you were worried about it 🙂
You are too good to me, Des! Thank you! :] <3
Right?! I found the categories were totally off for me too, and even more so, sometimes a single purchase would have multiple categories (hi, Costco runs for dog food, cleaning supplies, pharmacy and food!) I get that it totally works for some people, but I was just not those people, haha.
Also, ONLY $7K LEFT?!?!?! I am doing freaking cartwheels over here for you I am so excited! (And that says a lot because my version of cartwheels is just like, a swan dive headfirst into the floor, I’m really bad at them.) I’ve found it’s pretty motivating seeing your money go up in savings while you track, but I’ll cross my fingers it’s a smooth transition from debt repayment to savings!
($7K! STILL NOT OVER IT! YAY SAMANTHA!)
Only $5k and some change left now! EeeeEEeeeEeeeee!
Thank you for always being just as excited as I am about it 😛
I’ve used Mint for the past 2,360 days (almost 6.5 years) plus another online service prior to that for almost 3 years. It has really helped me to get a handle on my fixed expenses, and to go back and compare my spending habits over time. Like that one year I went to McDonald’s 114 (plus probably a few more when I paid cash). I set a goal to go half as many times the following year, so I went 52 times and beat my goal. Ok dumb example.
What I’ve found is I don’t necessarily need to optimize all spending, so I have major groups of budget items, then a $300/month catch-all for “everything else”. Funny thing is, I get paid irregular “per diem” reimbursements a few weeks after I travel for work, and since I travel a lot, I usually end up with negative spending in my “everything else” category.
I also use Personal Capital, which is somewhat similar to Mint, but I like it’s interface and charts better. I track my net worth daily using Personal Capital, and it’s fun to see the trends. It even sends me weekly emails to show how my spending compares to last month at the same point.
Oh man, I have SUCH Personal Capital envy. If it connected with Canadian services, I would be all over it! Sadly, it does not, but I’ve heard so many people rave about it for tracking your net worth. (That one is a pain in the butt to do in a spreadsheet, at least in my experience!)
Also, not at all a dumb example! I love your McDonald’s example because that’s the real base of personal finance: the habits and decisions we make on a daily basis in our regular lives. It’s not actually some obscure field just for spreadsheet nerds (although, ok yes, I am them, lol) It’s for everyone.
Back when I was tracking my spending, I used an app that I had to manually log everything into. It worked well for me, since I always had my cell phone near-by but didn’t always have a pen and paper. And the pie charts were cool.
I really miss tracking my spending, but it became far too complicated (and sometimes negative) when “my money” became “our money”. Although I suppose there’s a comprise somewhere in the middle there, where I track certain things only? Like say we wanted to get our grocery spending on track, for example. I’ll have to think about this more!
Oooof yeah I feel like tracking as a team brings up a WHOLE different set of issues! Gotta stick with what works for you and your life above all for sure (I find if I stop tracking groceries, I frolic over to the high priced stuff like I’m made of money, lol.)
I’m in my fourth year of tracking my spending and it is a fully formed and engrained habit now. I can’t imagine not doing it. Tracking my spending empowered me to reign in unnecessary spending in order to get out debt relatively quickly, and is now helping me make strides in saving for the future.
I use a google sheet for it, with spending divided into categories that live in bigger buckets. I tweak it every year and have layered a spending plan on top of it. I keep track of YTD spending by category in it, an actual list of things I’ve bought (inspired by Cait Flanders of course!), and a monthly pie chart for main buckets. I have a separate net worth tracker that I update monthly (formerly known as how soon will I be out of debt tracker).
I really appreciated your reflection and am with you entirely. Even though I can’t imagine not tracking my spending, I sometimes have mixed feelings about it. Watching big spending happen makes me sad, and the end of the month is always a complete countdown to roll over a new, fresh, empty budget month. I guess this is the part where we have to celebrate wins and bright sides instead of focusing on where we could’ve done better/beating ourselves up over spending money. I’ve removed my habit of spending without thought, and replaced it with spending tied to guilt, even though, through my budget, I’ve given myself permission to spend on myself. Still, I’d rather be mindful with my money. And I’ll wear my new MAC lipstick everydamnday until the guilt dissipates! Ha!
Ahhhhh A.B. yes to all of this! I’m really relieved to hear that someone else has sometimes-mixed feelings about it, even as a dedicated tracker (your spreadsheet sounds so boss! I’m still evolving mine but that’s the goal by year 4 for sure, haha.) I also love the idea of keeping a list of Big Things I’ve purchased every month – I might just steal that! (From you AND Cait!)
I think these tracking sheets will always evolve – the nerd in me likes seeing how I’ve fine-tuned it over the years. It’s also easy to get stuck in your ways – like, I’ve always done it this way so I’m going to stick with this process… But whatever works, right? Like I’m still figuring out how to think about/organize savings. I like the posting on horizontal savings goals I think you reposted. Maybe I’ll implement that in the new year. Until then, yay for several tangerine savings accounts!!
Thanks for the response and for keeping your post real and nuanced. Appreesh!
It’s really interesting to see your experience manually tracking vs. tracking with Mint.
We use Mint and used to be very involved with it – I’d log in daily and make sure everything was accurately categorized. Then…laziness happened! It has been months since we’ve had our spending completely reconciled >_>
Not to mention Mint can be inflexible at times and will scold you if you go over a predefined budget, no matter the reason.
Oh man I know! The Mint scolding still happens, which I can handle better now that it’s not my primary tracking mechanism, but there is NO nuance in those email notifications lol. Honestly my issues with Mint were totally me-driven – if I had been more involved or more ready to GET involved, I’m sure it would have been a different story.
This is so inspiring. I use Mint, and I open those emails, and it has not made me change my spending one bit. I need to do this. Like bad. I need to see just how much I’m spending on impulse groceries (like emergency berries after a “hard” day, which turns out to be about five days a week.) Yikes. At $4 a pop, that’s like the latte factor.
Will you share the spreadsheet you use at some point? Or have you already and I just have no idea where it is on your site? I know I need to do this, but creating the spreadsheet feels like a barrier to entry for some reason. I want to make it more complicated than it really is.
Emergency berries are my JAM and also one of the greatest killers of my grocery budget. They just feel so indulgent + healthy + reasonable, so I am right there with you! (My other food budget buster: Pinterest recipes that require like 25 ingredients. Must remind myself that I’m more Budget Bytes and less Martha Stewart.)
And I hope the spreadsheet I sent helps! It’s literally the most basic thing I used for the first six months, and didn’t want to overcomplicate things. I’ve shifted it a bit now into categories, but all within the same general setup, and all based on those first 6 months when I figured out the average I was really spending on each one! (There were some surprises, let me tell you.)
We’re just coming to the end of one year of expense tracking.
It’s gotten to be a habit, but it did take a few months to get there. One of the things that helped us was that we started during a limited spending month, so we had fewer transactions to log. By the time we got out of the month, we’d seen what a difference it could make.
And it’s terrific that I can check mid month and see “Whoops! Groceries are up. Better cut back a little.” or “Man, we haven’t eaten out in forever…oh, yeah, last week. Forgot that.” But it’s also pretty terrific for noting progress of now versus a year ago.
YES! The mid-month checkin – or even just the mid-month-general-awareness – has been so key for me too. It’s the difference between “Let’s splurge!” and “Let’s share an appetizer and stick to one drink,” so it’s not horrifyingly hard to stick to, but it makes such a difference.
Spending diaries? Spreadsheets? I have found my people!
I’ve been keeping a spending diary in Excel for nearly 4 years now. It’s been an extremely powerful tool in keeping our spending in check during house moves and job changes.
Definitely agree that feels discouraging when you’ve been plugging along with manageable spending, but then suddenly get thrown by one-off expenses.
I also chuck as much as possible on a cashback credit card, both to earn extra income and keep track of where the money goes. When the bill arrives, I compare it to my spreadsheet, and usually find some extra expenses I’ve handily forgotten. Actively adding items has been way more powerful than just checking bank statements after the event. Keeping track of cash has also helped, because previously cash withdrawals on my current account statements were just a big black hole. Meant I finally knocked my magazine habit on the head, once I saw how much all the small purchases added up. Sometimes it does feel too much, and too detailed, but it’s been helpful having the info to compare, and it’s definitely helped us live on less.
Omg Faith you have TOTALLY found your people because I literally could have written your comment myself – it’s seriously uncanny how much all of that mirrors my experience! And four years?!?! That is so amazing – I’m sure I’ll find all manner of new and interesting things every year that I keep it up (which is likely, and hopefully, every year from now on!)
For me, manually tracking my spending is a must! It’s the only way I know what’s going in and out. I use YNAB, which makes it easy to pop in my transactions on the go. Most of the times, whenever I make a purchase, I can easily open my app on my phone and quickly input my transaction. It literally takes seconds. I find this manual process keeps me in tune with my budget at all times.
I know people love Mint, but I hate Mint because it really is passive af!
Ahhhh Vic did I tell you I finally tried YNAB?! I did the one month trial and it reminded me of you every time! I didn’t keep going with it for a few reasons, but the main one was that I’m so in the habit of my spreadsheets now that it felt silly to pay AND change the habit. But it was as cool as you said it was – and I’m so glad it works for you! I’m not surprised, given how much I learned from it in my limited time with the system.
I’m aaaall about the manual tracking, baby! I would argue that everyone needs to track every dollar that they spend all the time. It’s easy to make assumptions about your money, but until you have the actual data to back it up, you’re going to be wrong about something.
We were able to start getting out of our debt thanks to realizing how much we spent each month. At the time we didn’t live outlandishly, but we were still living paycheck to paycheck. Budgeting and monitoring expenses was our wakeup call.
You don’t need a fancy app to track your expenses; an Excel sheet or Google sheet works just fine and you can customize it however you want.
Yessssss to Google Sheets! I’ve loved being able to make month-by-month changes the reflect the level of complexity I actually want, as opposed to trying to fit myself into a system that was never designed for me. If it means I spend a bit more time getting it set up, or pulling the data I want to look at, that’s good by me (plus again: it’s free.)
Good for you! I think tracking our spending for the past 20 years is one of the most important things my wife and I have done to contribute to whatever financial progress we’ve made. Another was paying off our mortgage. 🙂
Thanks Kurt! 20 years of tracking AND a paid off mortgage?! You’re an inspiration, my friend, for real.
I LOVE tracking my spending! Until I pull a report every month and have WTF moments about silly things like occasional coffee splurges. $45 a month on coffee? It’s not that serious! I do obsess a little over my budget though, and use Quicken (religiously for 5 years) to help me out. Until recently, I was just broad categorizing things like “Household” and “Personal Care.” Now I dive deeper to see exactly where every penny is going and try to hold myself accountable. And yes, I am currently sipping Starbucks as I type this. But in my defense, I had a gift card!
No defense needed at all Lauren – I am ALL ABOUT a good latte, and I’ve yet to kick my Starbucks habit, haha. How often I go has definitely declined, but honestly, when I look at the past year my biggest wins – and most of my goal achievements – were more a factor of increasing my income than by actually cutting back hard on lattes. I’m going to do a post about it soon, but in the meantime, if your Starbucks drinks make you happy, and you can afford them, go for gold!
Great post Des, really interesting to read about all your takeaways from this past year. I think tracking spending is one of the most important steps people can take to improve their finances. Awareness is so critical, and most of the time we overestimate how much we’re saving while underestimating how much we’re spending. Tracking our spending makes us acknowledge the truth head on.
Everyone is different when it comes to tracking spending, which is why there’s a lot of different methods and tools. I LOVE Mint, but I can definitely see how it isn’t for everyone. For me it’s motivating and visual. I don’t think I’d be disciplined enough to manually update a spreadsheet. However, with Mint, I can see exactly how I’m doing right away. I check the mobile app a few times per day. The most tedious part is taken care of and I can easily see how much I’ve spent and how much I have left in each category. I’ve told a few friends about Mint, some love it and some prefer a more hands-on approach. No wrong way, as long as you’re aware of how much is being spent and the progress you’re making towards your goals.
Thank you so much Matt – I couldn’t agree more! Tracking is hands-down at the top of my list of personal finance must-dos. And I’m glad to hear that Mint works for you! I’m sure they wouldn’t be in the position they’re in if it wasn’t a useful tool for a whole lot of people!
What a great idea. Glad you learned a lot. And once you think you have everything figured out, it’ll all change. Spending always does!
Hahaha oh man, I can only imagine – if we end up buying a house next year, I anticipate my spending just going TOTALLY haywire for a few months!
This.
This. Article. Is. So. Good.
Thanks for doing this and writing about it! My wife and I have been tracking out spending manually for a while now too, and it is SO eye opening. Time-consuming yes, but so worth it. I actually use YNAB now, still track it all manually, but love the interface. You may want to check it out one day if you get tired of spreadsheets.
Lastly, I love that you said it’s so emotional. That’s exactly what we’ve found too. The emotion is where it gets you. That’s where it’s tough. Great article Desirae! Keep em coming.
Nick
Awww Nick, thank you SO much for the kind words! I’ve checked out YNAB, but I think my problem was that I was still doing my spreadsheets so it always felt like an afterthought, if that makes sense? Because of that I didn’t keep going after the one-month trial, but I can definitely tell that it would be a useful tool! (And I love their philosophy on money management. So good.)
Yeah that makes sense! I switched from Spreadsheets to Quicken to YNAB, but if you’re still doing both, that would be a pain! Totally understand 🙂
Excited to see how long you decide to keep manually tracking!
a little late on comments (I was on vacation )
I and my wife have been tracking expenses manually for 30+ years.
The info gleaned from this minor effort is priceless (to quote a commercial) – I figure it takes ~ 30 seconds/day to capture and 10 minutes/month to compile – simple 8×10 paper capture to ~25 categories transcribed monthly to a spreadsheet to accumulate the numbers (KISS).
It is now ingrained as a habit even though we really do not need to track any more – it is still very interesting.
We’ve never budgeted per se because we felt setting constraints was not beneficial, rather knowing where the money went was more important – also both of us are careful consumers.
We achieved FI at ~ 50 and RE’ed shortly afterwards – mortgage was killed too long ago to remember having one (RIP:) .
IMO knowing where the $ went is the best way / eye opener to drive your goals.
Oh man I love this, thank you so much for sharing this perspective! I couldn’t agree more on knowing where things go is more important than sticking to strict categories. I’ve been able to figure out a rough ballpark for my “budget” categories based on my past spending, so I made my budget fit my patterns and not the other way around, but even still some categories are just super variable. Better to have the whole picture and be mindful than berate myself for spending “too much” in a single category!
Great post! I started tracking my spending about 20 years ago, and it’s been the best financial move I’ve made–even more important than setting up an RSP or learning about compounding interest. Once I started, I was finally conscious of my money decisions. (Everything else about personal finance starts from there, at least it did for me.) I also find it strangely meditative to go through my print receipts every month and tabulate everything. And as nerdy as this sounds, going through my old annual spreadsheets is a neat way to see how my spending patterns have changed. (I used to spend hundreds of dollars a year on movie rentals. But no longer. Thank you Netflix!)