You’ve heard me mention it before, and I’m sure I will talk about it a thousand more times: tracking your expenses will be one of the most beneficial things you can do for your finances. Consequently, the next practical step in getting your finances in order for 2014 involves tracking your expenses.
The tools you need
You can track your expenses automatically by using a computer-based program like Mint or Quicken. Or you can go to the opposite end of the spectrum and simply carry a notebook with you and jot down your expenditures as you make them.
Use whatever approach works best for you; the goal is just to start tracking.
My preferred method
I prefer to track my expenses through Excel. I’ve already shared this template with several of you, so I figured I would attach it for everyone else.
I’ve created a sheet for every month (note the tabs at the bottom of the workbook). Included at the top of each monthly sheet are categories I have created for my particular expenses. However, you can add or subtract whatever groupings apply to your situation.
You list each expense in the rows below the categories. You have a column for the date you incur the expense, the category (e.g, “HS” for household supplies), a description of the expense (e.g., cleaning supplies, trash bags, etc.) and a column for the amount spent. A completed row would look like this:
1-8 HS Comet, Trashbags $9.37
As you enter each expense, the sheet totals the amount in each category. In addition, those amounts tally on the “year total” spreadsheet, which calculates you spending for the entire year. Lastly, the cash flow sheet allows you to offset your total expenses against your net income.
Make your tracker your own
Again, you don’t have to stick with the categories I supplied. The great thing about Excel is that you can manipulate the document however you want. Just make sure your initials used for coding track correctly. In other words, verify that the initials you use correspond to the correct category.
In addition to being able to manipulate the spreadsheet, tracking your expenses via Excel helps keep you accountable for the cash that you spend, which won’t show up in an automated program.
Hopefully, this spreadsheet, a computer program, or the simple notebook can get you motivated to track your expenses. The tracking will pay more dividends than you can ever imagine.