Want to track your spending, but not sure where to start? You’ve come to the right place! Follow the tips below to start tracking your spending today.
Why should you track your spending?
Errors & Fraud
If you use debit or credit cards to make your purchases, there’s a good chance that an error was made at some point with one of your purchases. A duplicate charge. A miskeyed amount. A forgotten discount.
And there is the unfortunate potential for someone to steal your information and make a fraudulent charge to one of your accounts.
If you’re not tracking your spending, you won’t be able to catch these issues.
Tracking your spending is key to creating and sticking to a budget.
It’s hard to create a reasonable budget if you don’t know what you’re spending. And it’s hard to stick to a budget if you don’t know what’s going out the door.
What’s the easiest way to track your spending?
I’ve tried many different ways to track my spending over the years – and have the piles of receipts and endless Excel sheets to show for it.
For me, the easiest way to track my spending is to use a spending tracker app, like Mint.com or EveryDollar.
After all the frustration I went through trying to track my spending on my own, it sometimes feels like I’m cheating to use a spending tracker app. They are seriously that easy to use.
There are so many great apps out there – one spending tracker app is bound to meet your needs. Even if you use cash to make most of your purchases, a spending tracker app is still an easy way to track your spending.
Follow my easy steps below to track your spending using a spending tracker app.
1. Download a spending tracker app
I prefer Mint.com, which is free. (And when you’re trying to budget, free is good!)
Mint.com links to all your different accounts so that you can see all your purchases in one place. That makes it super easy to track your spending.
EveryDollar is another spending tracker you can use. It costs $8.25 per month or $99 for an annual membership. (I use EveryDollar’s free budgeting app, but stick to Mint.com for the free spending tracker.)
2. Determine the spending categories you want to track
Next, decide which spending categories you’re going to use. Spending categories are the different buckets you’re going to use to group your purchases.
Grouping your purchases helps you to see trends in your spending. It also helps you track against a budget once you create one (more on that later!).
Your spending categories can be general (food) or more specific (groceries, fast food, dining out).
The goal is to have spending categories for each of your purchases. And the category should make sense for that purchase. (Your furniture purchase shouldn’t go under “dining out”.)
Most spending tracker apps (including Mint.com) have a pre-set list of spending categories. I recommend that you don’t just default to the pre-set list of categories. If you automatically start using the categories in your app, you might get frustrated when it doesn’t match up with your purchase types. And frustration can quickly lead to quitting when it comes to tracking your spending.
Instead, take a moment to think about your unique situation and write down what you think your spending categories should be. Don’t worry if you don’t think of everything up front. If you miss a category, you can add it to your list later.
3. Enter your spending categories into the spending tracker app
After you pick your spending categories, enter them into the spending tracker app.
The app will probably have some pre-set categories. Some of those categories will probably be the same as the ones you decided to use.
You’ll only need to add the spending categories from your list that are different from the app’s pre-set categories.
4. Sync the spending tracker app with your financial accounts
Follow the instructions in your spending tracker app to link the app with your financial accounts.
Once you’ve linked all your accounts, you’ll be able to track all your purchases in a single place in the app.
Do this even if you make most of your purchases with cash. You still want to be able to track the few purchases you do make electronically (like utilities or mortgage payments).
5. Add any cash purchases
Do you make any purchases with cash? If yes, use the spending tracker app’s manual transaction feature to add these cash purchase to the app as they occur.
Then all your purchases (even your non-electronic ones) are still tracked together.
It can be hard to remember cash purchases, so I recommend entering them into the app as soon as you make them.
6. Add new spending categories as you start tracking your spending
You’re going to have purchases that don’t fit into an existing spending category. Rather than think of it as a one-off to ignore or to move it into a category that doesn’t make sense, add a new spending category.
Over time, you’ll get a really good list of spending categories that fits your unique situation.
If you haven’t created a budget yet, now is a great time to create one.
You can take what you’ve learned tracking your spending and apply it to create a budget you’ll actually keep. Check out this article for a step-by-step tutorial on how to create a budget.
Comments or Questions?
Have a comment or a question? I’d love to hear from you! Visit me on Instagram @eastbymidwest and leave a comment or DM, or send me an email at firstname.lastname@example.org.
Thanks, I somewhat know how to do this with Mint, yet struggle to consistently do it.
Agreed – it can be tough to stick with it. I like to make a game of it – how close did my spending match up with my plan? It’s a competition with myself, but it keeps me motivated.
The big problem with tracking and budgeting that few articles talk about, including this one, is that most receipts contain items from several categories. Sure, you can go over each receipt with a magnifying glass, pick out items for different categories, add them up manually, estimate how much of the sales tax to put into each split, and then go into the app and meticulously split a bunch of transactions, but most people don’t have that kind of time. Almost none of the articles I’ve read even acknowledge this killer problem, and none offer a meaningful solution.
Hi Mark – That’s a really good point. I tend to categorize receipts from places like Target or Walmart under what I generally bought there that day. If I purchased a lot of cleaning products, I’ll put it under “Home Supplies”. If I purchased a lot of clothing, I’ll put it under “Clothing”. I try to consistently categorize these types of receipts using this method. That helped me to figure out over time what monthly budget number would cover the “extra” in these categories — which is mostly the candy that I want to pretend that I’m not buying!
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