How to Track Your Spending

Earlier this month we tackled how to build a budget. For those of you who tried a budget for the first time, how has it been going? Budgeting is a skill that can take a while to perfect, so if you feel like you way overspent in one category while underspending in another, don’t get discouraged – just look at the month of data you now have, and move forward with greater clarity in the months to come!

Once you have a budget (the amount you’re planning to spend in each category, as well as amounts you’d like to give away, save, or invest), you need to figure out a system for tracking it (since that’s the key to following it!). The good news is that there are many ways to do this, and almost certainly one that will be a good fit for you! I’m going to run down a few of my favorites today, but would love to hear from y’all in the comments.

A custom Google Doc | This is the system I use, and warning: it might seem a little insane on first glance. But if you use very little cash, don’t mind a little upkeep, and LOVE data, it might be the right fit for you! The basic premise is that the amount in your budget accrues each day, which is a neat way of feeling like your budget is growing, not shrinking!

The envelope system | Dave Ramsey fans will be very familiar with this one! It’s perfect for people who are worried about overspending, because almost everything is paid for in cash, and once the cash in each category’s envelope is gone, it’s gone. You can read more about this strategy on the Dave Ramsey site, and read about our friend Nancy Ray’s envelope system experience here.

The EveryDollar app | EveryDollar is an online budget app created by the Dave Ramsey team and is basically a digital version of the envelope system. I haven’t used it personally, but my sister is a recent convert who is loving it, and our Marketing Director Amber also uses it (see her PowerSheets above)! The app is free for 15 days then $99 for a year.

You Need a Budget | Another online budget app with rave reviews is You Need a Budget, or YNAB. I love that not only do they have a great tool for tracking your spending, but it’s guided by a strong personal finance philosophy based on four rules (give every dollar a job, embrace your true expenses, roll with the punches, and age your money). YNAB is free for 34 days, then $50 for a year.

Mint.com | Mint promises to bring everything from budgeting to bills together – your financial life, in one place that’s easy to understand. Mint has been around for awhile, and seems to be the most polarizing of the sites I’ve listed here – people either love it or hate it. When I used it for a few months, I felt like I was going in more often than I’d like to correct its auto-categorization. Mint is free.

I’d love to hear: Have you found a system of expense tracking that works for you? What do you use?