How I Track Expenses And Why I Do It

Disclaimer: I am not a professional financial advisor. I am just sharing what works for me in terms of personal finance.

Laptop showing a spreadsheet

Keeping track of my expenses has been a habit of mine for almost a decade, and it has been very eye-opening. At first, it felt like a chore. But now, I don’t really need to think about it because it has become the norm for me. Below is the overview of how I track my expenses, but again, this is just what works for me.

How do I do it?

1. Identify expense categories

Identify where you usually spend your money – rent, insurance, transportation, utilities, groceries, etc. – and use them as expense categories. I can get pretty specific in my categories (e.g. eating out, movies, clothes), but see what works for you. I also have a catch-all category called “Others” where I put non-regular expenses (e.g. travel, taxes, medical expenses, if you moved houses, etc.)

2. Choose your tool

There are many apps that you can use to track your expenses, but personally, I will always be a spreadsheet kind of girl. Here’s an overview of how I do it. I have:

  • 1 file for the year
  • 1 worksheet per month, where I list all of my expenses and the corresponding expense category
  • 1 worksheet to summarize all expenses in a table, per month, per category. I even compute of the percentage per category.

Here is a very simple template that you can use, if it works for you.

Sample of the monthly worksheet
Sample of the summary worksheet

3. Allot time

Back in the Philippines, I used to almost always pay by cash. Therefore, I list expenses daily, lest I forget what I spent. Here in New Zealand, it’s mostly cashless and we usually pay via debit card and we can easily see our transactions from a mobile app so I just list down our expenses weekly.

Why do I do it?

1. Awareness of our cashflow

I can’t manage our finances if I don’t know what’s happening. Tracking our (mine and the Mister’s) expenses lets me know where our hard-earned money goes. It also allows me to make sure that our expenses are manageable – a.k.a. “we are living within our means”.

2. I can identify where we can cut back, and helps me stick to our budget

It may not be obvious, but small frequent expenses really add up. Also, when I look at the summary worksheet of my spreadsheet, and I see that we have been spending a lot on a certain category, then I can take note that we need to cut back somehow. 

Having said that, if you overspend for some reason (e.g. emergency expenses), don’t be discouraged. Just keep on tracking, if you haven’t already. If you see that you consistently overspend in a particular category, you may need to re-evaluate your budget.

3. Catch fraudulent expenses or unknown charges

By tracking our expenses regularly, I have refunded a fraudulent overseas transaction, which would have easily slip past me if I wasn’t paying attention.

Give tracking your expenses a try. See what method and tool works for you. It’ll be a huge step towards getting your finances figured out and sorted. Good luck! 👍


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