Effective Expense Tracking and How to Do It

Nobody wants to live paycheck-to-paycheck, yet most high-income Americans are still doing so. Whether you’re an entry-level employee in Salt Lake City who is just trying to survive the month or someone who thinks their spending is out of control, it’s time to keep track of your expenses. Luckily, there are many ways you can do this — from using an old-fashioned ledger to letting an app do all the work for you.

However, if you find yourself in trouble because of uncontrolled spending, it’s best to consult a repossession attorney about it. And follow these tips to avoid further problems.

Keep a Ledger or Use Tracking Apps

Having a ledger is the best way to keep track of your spending. Whether you’re using a notebook, a spreadsheet, or a tracking app like “Mint,” it’s important to split your expenses into categories like transportation, food, bills, and more. Microsoft Office Excel and Google Sheets have “expense tracker” templates that automatically calculate totals and create graphs for you. All you need to do is to fill up the tables with the categories, items, and price.  This way, you can see which category or item you spend too much on.

Tracking your Costings

Limit and Omit

The ultimate goal of tracking your expenses is to minimize unnecessary spending. If you find that your daily Starbucks habit is eating into your paycheck, stick with the stuff in your office coffeemaker for now. Limit your daily expense to what you truly need. Figure out a fixed value and follow it to the letter.

You can always allocate spending for expensive coffee or food during the weekends as a reward for getting through the week. Changing habits like this gradually can help you free up your budget for bills and emergencies.

About 62% of Americans shop online at least once a month. Popular shopping websites like Amazon can provide you with a spreadsheet of your chronological order history. There, you can find the exact item you bought, when you bought it, and for how much. It’s wise to do this monthly while comparing it to your online bank records.

By scanning through your order history, you can reevaluate your online spending habits. Ask yourself if your recent purchases were urgent. Did you really need that shower caddy you got on a “buy one, get one” deal? If you find yourself buying items you don’t use, cut back on spontaneous shopping and focus on the essentials.

Divide and Conquer with Envelopes

One popular way to sort expenses is through allocating an envelope for each spending category. Though you might have to stick exclusively to spending cash, it’s a concrete way to manage and keep track of everything. You can even label the envelopes with the weekly or daily spending limits you just set so you won’t forget about them.

Keeping track of your spending can be an overwhelming task, especially if you’re just starting to enter the adult world. But it’s worth the time and effort to be accountable for your expenses. Always follow your limits and don’t be afraid to cut a few corners. After all, you should always save more than you spend.