tracking expenses


In BUDGETING BASICS, I showed you how to create a very basic Income minus Expenses budget and how to leave enough room in your budget for fun as well as priorities. There is so much more to budgeting than just creating a plan on how you want to spend your money though. One of the most important steps in learning to create a realistic budget is to know what your expenses are going to be. The easiest way to predict that is to track your expenses every month. Where budgeting creates a plan for you to follow throughout the month, tracking will show you exactly where your money is going and how to plan for it the next month.

There are a few different ways to track your expenses. Many people just try to remember how much they have spent compared to what they think is in their bank account. This can cause problems, especially because you may forget some items that have come out. Our brains, even if we are good at math, cannot possibly keep track of all of our expenses and incomes, especially if we are out shopping.

Just looking at our bank accounts on a daily basis can give us an approximate amount of what we truly have in our account, but banks can post debits to your account in real time or at a later date. Some accounts post fees based on different criteria, as well, that you may not take into account. (See CHECKING ACCOUNTS to learn more).


Here are two ways you can track your expenses. If you have opened a bank account and have checks, you probably got a TRANSACTION REGISTER like this:

This is what a typical transaction register from your bank looks like. They are free–ask for them when you need them!

This type of ledger is convenient as it is portable and can keep track of all income and expenses. There are different columns labeled: NUMBER OR CODE; DATE; TRANSACTION DESCRIPTION; PAYMENT,FEE, OR WITHDRAWAL (-); (CHECKMARK); FEE; DEPOSIT, CREDIT,(+); ($TOTAL).

Note the categories listed at the top.

NUMBER OR CODE: At the top of the register is a code you can use to help designate what type of transaction you are making. If you are writing a check, this is the place where you write the check number. Codes include DC for debit card transactions, ATM for automated teller, AD for automatic deposit, etc. You can use any code that works for you.

DATE: Write the date of the transaction. This will help you find information if you ever need it to dispute a bill or a charge.

TRANSACTION/DESCRIPTION: Here you can write down where you made the transaction, or even what category the transaction belongs in (gas, for example).

PAYMENT, FEE, WITHDRAWAL (-): This column contains the amount that was spend or removed from your account.

(CHECKMARK): This is a small column to check off the transaction once it is cleared from your bank. Some charges may not come out immediately, but you should write them down as it happens, and then check it off when it clears at your bank.

FEE: This column is to be checked if the amount is a fee, such as a bank fee. (Again, this is helpful to keep track of later or just to see how many fees you are actually paying).

DEPOSIT, CREDIT, (+): This column is for writing the amount that is added to your account, such as paychecks or other deposits.

$TOTAL: Here is where you add or subtract and keep track of the total that is in your account.

There are two ways to keep track in your transaction register: single line and double line. Single line means you use one line per transaction as follows:

This example shows that a debit card transaction at TJ Maxx on Feb. 1 for $50 was made and subtracted from the original $1000.00
Here is an example of a single line transaction including withdrawals and deposits. The transactions that have cleared in the bank have been checked off in red ink. We can easily see that we have $825.00 in our account.

Double line means you use 2 lines per transaction, with one line being used to show your math. This might be useful if you have poor writing, if you prefer the space in between to see the information better, or to do the math quickly as you make transactions. Here is an example:

A double line transaction gives us more space to see each transaction and have room to do the math in the total column.

As you can see, either way can work. Transaction registers can be taken with you when you shop and you can immediately write in your transaction, or you can keep your receipts and write them in when you get home. You can also wait until it is in your account to write it down, but you might be risking something not being added early (sometimes restaurants do not add the tip until later in your account, for example).

Another way to track your expenses is to create a sheet or download an expense tracker like the one I created. (Here is FREE copy of my own EXPENSE TRACKER to use to get started!)This is a simple design I use for myself and only has a few columns, DATE; DESCRIPTION; AMOUNT; AND CATEGORY. I added category because it makes it easier for me to analyze later and budget more realistically. Here is an example:

This ledger is only for expenses and does not keep a running total. However, I can create categories that I can later use to create next months budget and reconcile this months budget to see if I am on track.

So, what is the point of keeping track of all of this? First, it allows you to see how much money you have exactly in your account (if using the bank type ledger) so that you don’t overspend, saving yourself overdraft fees, late payments, and poor credit. Second, it allows you to categorize your expenses in order to see what you typically spend and how you can either budget for that amount each month or cut back in certain places if needed. Third, it puts YOU in control of your money. Just like tracking your food when you are on a diet, tracking expenses allows you to see, in real time, how much money you are spending. If you are an emotional spender who tends to overspend on Amazon when feeling depressed, you might not realize how much you are REALLY spending. Tracking every purchase allows you to see what you are doing and be accountable for your actions.

If you are truly ready to take charge of your money and start on a path to building wealth and having a comfortable lifestyle, start with a simple budget and track your expenses. Join me next time when we talk about the different categories within your budget and how to make them work for you.

Please like, comment, and follow this page for more on Being Grown Up. Follow me on Pinterest, Facebook, and Instagram for more information. Take care! XOXO


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