The First Step To Mastering Your Money, that no one else is talking about…

So, you’re finally ready to get your financial wellness in order.  Maybe its because you’re reached a certain age?  Or you want to buy a house? Or you know that retirement age is creeping closer?

 

You’re probably thinking the first step is to create a budget, duhhh.  WRONG.  And this is where a lot of people fail when they decide to get serious about there personal finances.  They jump right in to cut, cut, cut.  Deprivation.  And then screw it, I need those shoes in my life and to order take out. This was me!

How could I arbitrarily cut expenses out of my budget when I didn’t even know how much I was regularly spending every month??

Tracking your expenses is the first step to taking control of your finances.

This is what we’re going to cover in this article:

• how long to track your expenses

• where you should track your expenses

  • pen and paper

  • spreadsheets

  • apps and websites

How Long To Track

This isn’t going to be helpful if you just track for a week, or even a month.  I suggest tracking every penny you spend for 3 months to establish an average for what you typically spend every month.  And that is when you move on to creating a realistic budget for yourself.  Not one based on deprivation, but one based on the reality of your current spending habits and goals!

Where and how to track

There are so many different ways to track your expenses out there.  This is all going to be a whatever works best for you type of situation.  There are three main methods: pen and paper, spreadsheet, and apps/websites.

Manually Tracking

I first suggest starting out either tracking on with pen and paper, or manually in excel.  I personally feel like doing the work of manually tracking each swipe of your credit card makes the purchase feel real and impactful.  You’ll feel the “pain” of each purchase you make and dollar values going up each month.

For pen and paper method, grab a dedicated notebook and put it somewhere visible like right when you walk in your front door.  Keep your receipts and create a ritual and writing down your expenses every day. For me, when I get to work every morning I make sure to open up my spreadsheet and record any expenses that I racked up since the previous day.

If you’re more of a spreadsheet/excel lover, like me, you can create your own expense tracking sheet or there are plenty already made out there on websites like Etsy.  This is the one I created and have continued to use for the past 3 years (super simple, no frills) available for $7.

Websites and Apps - Auto Pilot

After you have gotten in the habit of consistently tracking your expenses, you may want to move onto a more streamlined approach.  There are so many different apps out there that will connect to all of your banking and credit card accounts, categorize your expenses and track everything for you!  Try out apps like Mint, You Need a Budget, and Every Dollar.  This works great for a lot of people because it pretty much puts your tracking on autopilot. Just open up the app and glance at what your spending looks like for the month.  I personally continue to manually track after 3 years because I feel like the act of my recording my expenses makes the purchase feel real and I’m less likely to spend on things I don’t really need.

Let me know in the comments how you track your expenses, if there are any apps you’ve found helpful and why you’re ready to get serious about your finances!