1. Money
You can opt-out at any time. Please refer to our privacy policy for contact information.

How Can I Keep Track of my Spending Patterns?

You Might Be Surprised to See Where Your Money Goes


Have you ever tried to lose weight by keeping a record of everything you eat? Sometimes the results are surprising. You may not realize just how many cookies you consume until you track the data.

Budgeting is similar. You may not realize how much money you’re spending on coffee, restaurants or clothes until you track the data.

Logging your dietary habits helps you develop an accurate idea of how many calories, carbs or fat grams you intake each day. Similarly, tracking your spending habits helps you discover how much money you’re spending – which might be wildly different from the amount you think you’re spending.

How Long Should I Track My Spending?

Many beginners devote between two weeks to one month to tracking every transaction before they create a budget. Two to four weeks should provide enough data to let you see your day-to-day habits.

After you formulate a budget, you should continue tracking your spending to see how your “actual” spending habits align with the “ideals” that you’ve outlined in your budget. These budgeting worksheets can help you compare your “actual” against your “ideal.”

Help! I’m Having Trouble Keeping Track of Everything.

Today’s variety of payment methods can make tracking your expenses tough. How can a person reasonably keep track of every single cash, credit card, debit card, check, automatic bank withdrawal and PayPal transaction?

Here are a few tactics you can try:

#1: Stop Using Cash. You have automatic, electronic records of every credit card, debit card, check, automatic bank withdrawal and PayPal transaction. The only type of transaction that isn’t automatically recorded is cash.

If you stop buying things with cash, you’ll spare yourself from the hassle of needing to manually record your spending. Instead, you can just review your electronic records one day a week – e.g. every Saturday – and input these records into one centralized location, like a spreadsheet, a notebook, or in one of these budgeting worksheets.

I have one important disclaimer, though: some people spend more money when they’re swiping plastic. They spend less when they have to part with physical, green dollar bills. If you fall into this category, continue paying for things with cash. There’s no reason to put yourself in a situation in which you’re likely to spend more than you ordinarily would.

Which leads to my next tactic ...

#2: Try The Envelope System. At the beginning of each week, stuff a series of envelopes with cash. Dedicate each envelope to a particular spending category, and note the amount that you’ve put into each envelope. For example, your envelopes might be labeled “Lunch $25,” “Gasoline $75” and “Target or Wal-Mart $40.” Since you can’t perfectly predict all your expenses, especially in the beginning, keep one “Miscellaneous” envelope, as well.

At the end of the week, note the amount leftover in each envelope. Your lunch envelope, for example, may have $5 leftover. Your gasoline envelope may have $12 remaining. Your Target/Wal-Mart envelope may have gone “over budget” – you had to use $10 from the “Miscellaneous” envelope to cover the shortcoming in your Target envelope.

This is an easier way to track your spending. You’ll be able to see your spending habits within broad categories, without enduring the hassle of detailing every single transaction. You’ll also be able to pay for things in cash, which might motivate you to spend less than you would if you were swiping a plastic card.

Read More: How to Track Your Spending By Using Multiple Accounts

Of course, if you’re a detail-oriented person, then you could always try the final tactic ...

#3: Mark It Down. Keep a small notebook and pen in your purse or pocket, in which you log every transaction. You could also log it into an e-notepad on your smartphone.

The advantage to this? You’ll think harder about each expense. Writing down every transaction causes you to be more conscious about your spending habits at the moment you’re making the transaction.

The disadvantage? It’s a hassle. It’s easy to slack off. It’s easy to forget. And there’s no way to retroactively collect a day or two’s data if logging your expenses slipped your mind.

©2014 About.com. All rights reserved.