How to Track Personal Expenses

You can track your personal expenses in several ways. Software, worksheets and planners make it possible for you to simplify the process and keep a record of your spending habits. Choose a method that works for you and follow it for at least two to three months for an accurate representation of how you spend money.

Decide how you want to keep a record of your expenses. You can purchase software or use the free Budget Tracker 1.0 download to help you monitor your spending habits (find a link in the Resources section). Other options include worksheets, budget planners or a notebook.

If you decide to use a notebook, draw a line down a page to divide it in half. Label the page with the name of the month. Record all of your income for the month on the left side.

Divide the right section into essential and non-essential categories. Essential expenses consist of money you must spend, such as utility bills, gas and auto maintenance, rent or your mortgage payment, property taxes, insurance premiums and basic groceries. Non-essential expenses cover purchases beyond survival needs and may include entertainment or luxury items.

Create subcategories of fixed and variable expenses under the essential category in your notebook. Fixed expenses encompass anything you spend the same amount of money on every month such as insurance, loans, mortgage or rent. Variable expenses fluctuate in price and may include food, utilities and gasoline.

Use monthly credit card statements to help you keep track of your expenses and include this information in your records. These itemized statements can reflect an accurate picture of your spending habits depending on how often you use your credit card.

Keep a record of every transaction you make including small cash purchases on items such as a newspaper or a piece of candy. Save your receipts and enter daily purchases in the appropriate place.

After a few months of record keeping, average your expenses and income for the period to get a monthly average of both. Look for places where you can cut expenses, especially if your expenses are higher than your income. You will find most of your cuts in the "Variables" category, and most will probably be in broad categories like "Entertainment," "Groceries," "Vacations" and "Miscellaneous."


  • Make sure you include a separate category called "Dining Out." Many people are surprised at how large their restaurant bills are for a typical month, and how much they can save by cooking their own meals more often.


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