One of the first things to do to get your finances in line is to track your spending. You’ve got to know where your money is going to formulate a plan and create an effective budget that you’ll stick to.
Tracking your spending will bring things to light and get you on course to correct the financial mistakes that you’re making month after month. Do you have an idea of how much you spend at the Grocery store? How about how much you spend eating out? What you discover may surprise you.
Tracking money is hard and boring for most folks. You have to make it a habit regardless of the tool that you use for tracking.
Tracking money for a family is even harder without good communication and an alignment of goals between family members, spouses most importantly. Before you start tracking your spending be sure to come up with a plan for how you’ll track and coordinate getting all of the figures together. I suggest briefly going over spending nightly to ensure that everything is transparent and accounted for.
Here are a few ways to track your spending.
- Pen and Paper – If you’re not into using the computer or phone then just get your transactions down with good old-fashioned pen and paper. Download my Spending Tracker template here.
- Mint.com – We’ve had the most success with using Mint. We use credit cards for day-to-day transactions, have automatic payments in place, and write some checks. Once you’ve linked your accounts to Mint then it’s fairly easy to get your transactions out of Mint. Most of the time goes into categorizing the transactions that Mint can’t figure out. You’ll have to categorize all of your checks but Mint does a good job with figuring out the category on the card transactions.
- Phone Application – A third good option is to find a good phone application to enter your transactions. A couple of applications that come to mind are EveryDollar and Spending Tracker. Most of us always have our phone nearby. If you don’t want to use Mint or the paper option then try out a mobile application.
I have an earlier post here on tracking spending.
It may take you a little time to figure out the best method for you to tracker your spending. It’s so important for your financial future that you do this. Just get started and find out where your money is going!