It’s the end of the month, and you can’t figure out where all your money went. You should have enough to cover your expenses, but your bank balance is creeping closer and closer to an unacceptable number. Does this sound like a situation you have ever been in?
Keeping track of your spending can provide insight as to where your money goes each month, and it provides information on where changes may be needed in future budgets. Fearing the results or lack of motivation may be reasons some choose not to track, but finding a method that works best for your lifestyle might make the task a bit easier.
- Spreadsheet. Set up a spreadsheet register with income and spending categories to record all transactions. This setup has the ability to total the categories at the end of each month, and it can keep a running tally of credit card balances.
- Apps. Enter income and expenses into a phone or tablet app each month. Convenience is the major advantage to this method, and there are free financial apps, like mint.com, that have the ability to monitor expenses.
- Pencil and Paper. For some, going ‘old school’ is the preferred method. Each day, write down all income and expenses into a notebook or calendar, being sure to identify categories. Add up category totals at the end of each month. Keep pencil and paper readily available in purse, wallet, car, or pocket.
- Envelope Method. Label a separate envelope for each of your spending categories. At the beginning of each month, place the budgeted amount of cash into each envelope. Throughout the month, take out the cash for expenses, and return the receipts to the appropriate envelopes. If no receipt for an expense, simply record on a sheet of paper or directly onto the envelope. Add up receipts at the end of the month for summary totals.
- Other. Additional methods include tracking expenses by store (as opposed to spending category), and waiting until the end of the month to label and total categories.
There is no right or wrong way to keep track of your expenses. Utilize a system that works best for you! For more information on budgeting or tracking expenses, visit the UWW Financial Literacy Center or schedule a one-on-one coaching session. We are here to help!