How to Track Your Expenses

Human hand reaching for money
••• alicemoi / Getty Images

Tracking your expenses is one of the key factors in making your budget work for you. If you do not know how much you have spent each month, you cannot tell when you have overspent. Even the small expenses can cause you to blow your budget. There are several options available to you track your expenses. One of the simplest is a written ledger or tracking system. It may be even easier to choose budgeting software that works with an app to track expenses on your phone.

This will allow you to keep up while on the go. It's also important to know how to track your expenses in a notebook. This can also help you become more aware of what you are spending and where you are spending it. It can help you identify the areas where you need to change.

Create a Ledger

First, you will need to have your budget with you. You should also have a notebook available to you. You can divide your paper into about three columns a piece. You will need to write down each budget category at the top of the column. Then you need to record the assigned amount next to it. If you have not created a budget, and are tracking your expenses so that you can create one, then you should decide on basic spending categories such as utilities, food, rent, eating out, fun money, and insurance. Record each of these at the top of the paper.

Record Your Expenses Throughout the Day

Next, you will need to take time each day to record your expenses.

As you record each expense in a category, you will need to keep a running total of how much you have left in that category. Simply subtract the amount you spent from the current total and record the answer. It may be helpful to have two separate columns, one for expenses and one for the current total.

You may also want to record the total in another color. If you are tracking expenses to determine how much you spend you will need to add the amount you spent to your running total. If you are married, it helps to sit down and review how much was spent each day. It is especially important if you are just starting to budget. It can help you encourage each other as you change your spending habits

Stick to Your Spending Limits

You will need to stop spending when you see that you are out of money. It is the essential step in staying on budget. You may find that your budget is unrealistic or you may need to transfer money between categories. Take the time towards the end of the month to adjust next month's budget so that will work for you. It is important to remember that saving and debt payments should take precedence over eating out and vacations. You will need cut back in some areas, but you should still be able to eat every day.

Choose What to Do With the Money You Did Not Use

At the end of the month, you have the option of rolling the money over into the next month's category or transferring the money to a savings account. For bills that vary like your power bill, you may want to roll the balance forward to help even out the cost of the utilities each month.

For things like groceries, you may want to transfer it to savings so that you can build up your emergency fund or work toward other goals. 


  1. Another option is to use budgeting software or a budgeting system to track your expenses. It can save you time, and it makes it easier to manage your budget each month. There are a wide variety of options you can use to manage your finances, and it is important to find the right budgeting software for you. Ideally, you want to find something that will work across platforms and sync with your bank. If you are married, you want something that allows both of you to enter expenses on the go to make tracking your spending much easier. 

  2. Another option is to switch to cash only for categories where you do a lot of spending each month. For example, groceries, eating out, and entertainment categories. You will set up an envelope for each category and put the amount you budgeted in it at the beginning of the month. When you go shopping for those categories, you will take the envelope with you. You can keep the receipts in the envelope so you can check at the end of the month to see how much you spent.