STAYING ON TOP OF YOUR EXPENSES

WHY WE NEED TO TRACK OUR EXPENSES REGULARLY

If we want to be able to stick to our budgets one of the most important things that need to be done is to have a good method for tracking our expenses on a very regular basis. In the past, I would get so discouraged by setting a budget and going way over it every time. The problem was that I was recording what actually happened after too much time had gone by. Once the week had passed, I added up everything and would usually find out that I went over budget.

In my mind, I would think that we were doing great and that I really hadn’t spent much. Then as I was recording what happened I would realize I forgot about those batteries that I picked up. I forgot about the extra gas I needed because we traveled more. And also forgot about the pair of pants I had to pick up for my son to start a new job. I realized that it wasn’t working to record everything after it already happened. It was too late to do anything at that point.

PLAN OUT YOUR WEEK

I have found it really helpful is to plan out known purchases that will be part of my weekly expenses. My weekly budget that covers things like gas, groceries, and other items that might come up. I try to think through the week first and put down an estimate of what I might need to spend. Then I have a better idea of how much cushion there might be left in the budget for the week.

If it looks like expenses will be tighter in a given week, I will know to try to hold back on anything that isn’t really urgent. I do my grocery shopping at the start of my budget period. That way I can record what was spent on groceries for the week, as that is usually the largest expense. If I had to spend more on groceries this week, I can determine if there is anything else we should hold off on until next week.

RECORD YOUR EXPENSES EACH DAY

I found that when I started updating my budget on a daily basis I was so much more successful. It was easier to stay within the amount I wanted to spend. By recording your expenses right after they occur, you won’t have the risk of forgetting about those little purchases that you made a few days ago. I could quickly see if we had already hit our budget early in the week. This would make me aware that any additional purchases would cause us to go over budget. That’s not to say that something might come up that I would need to purchase. However, knowing that the purchase would cause us to exceed our budget would make me put a little more thought into whether the item was really needed.

Not only does recording your expenses daily help keep you on top of your spending, but I also find it easier to record a few things each time than have to record a week’s worth of activity all at once.

HOW CREDIT CARD PURCHASES CAN GET AWAY FROM YOU

If you are tracking your actual expenses against your budget based on the activity in your checking account, it is very important to add the extra step of tracking your credit card expenses as they occur, not when the bill comes. One way that I have found very helpful in sticking to my budget when it comes to credit card purchases is to record the purchase against my budget, and then subtract that amount out of my available checking balance (on a separate spreadsheet) – not in the actual checkbook register. Then I add that amount back as “due to” whatever card it is. When the bill comes the amount of cash has already been set aside for all purchases that have been made.

If you feel like you might not be disciplined enough to not want to spend that money, consider making weekly payments on your credit card. That way you won’t end up with a bill at the end of the month that you don’t have the cash for.

IF YOU DO CREDIT CARDS, ANOTHER TIP IS TO LIMIT YOURSELF TO ONE CARD IF POSSIBLE

The more cards you use, the easier it is to lose track of a purchase until the bill arrives. Make sure you have online access so that you can check your purchases frequently. Otherwise, you might forget about some of them. If available, it is also a good idea to get the app to access your credit card activity.  That way you can periodically check it even when you are on the go.

If you must use a separate card for a certain store other than what you typically use. Make sure to record the purchase as soon as you get home. For example, I have one card that is my main card. However, when I go to Target, I use the target red card to get 5% back. But, I don’t have online access to check my balance and record the activity. So, if I make a purchase at target with that card, I record that purchase as soon as I get home from the store. It is too easy to forget about the purchase until a month later when the bill shows up.

FIND A METHOD THAT WORKS FOR YOU

There are many different options on how to record your expenses. Many people love some of the budgeting apps that allow you to track your expenses against your budget. Some of them can even be automated, so if you struggle with taking the time to record your activity, that might be something to consider. I track my expense in a spreadsheet, which is a little bit old fashioned-ish. But, I have a method that works that I really like. I haven’t had the time or energy to try switching to another method.

However, you decide is the best way to track your expense, the most important piece is to just make sure you are doing it as regularly as possible if you find that you are struggling with overspending. That is the best way to avoid accumulating all of those purchases that you had forgotten about by the time you go to update your budget.

Thanks so much for checking in! If you would like to hear the podcast version of this topic to check out Lola’s Frugal Life Podcast! Also, be sure to check out my other blog posts on this site!

I would love to have you join my mailing list! Sign up here:

Email address:

Leave this field empty if you’re human: