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Are you having trouble managing your money? Does it seem to disappear before you have time to save a dime? If so then it’s time to track your spending.

Starting right now, write down every purchase you make for the next month.  Use your smart phone, or write it down on a piece of paper, I don’t care, just start doing it so you can see where your money is going

What are you spending your money on?

Coffee, snacks, lunch, drinks, groceries, and shopping, it all adds up fast! When you start to track your spending you’ll subconsciously start spending less since you know.

Remember the key is to track everything for an entire month, don’t forget about those automatic expenses, such as your rent or mortgage, cell phone bill, magazine subscriptions, gym memberships. Don’t worry if you’re shocked by how much you’ve been spending, there’s a reason all personal finance experts recommend tracking your spending, with this new info you can create a budget.

track your spending

Create a budget

This is pretty simple really. Just take the amount you’re taking home in pay every month and then write down all the expenses you discovered from tracking your expenses. It may not look pretty, but at least you can see how much money is coming in and how much is going out. If you’re looking for a detailed spreadsheet to help with your budgeting, I recommend this one from Squawkfox.

Once you have your budget in place it should be pretty easy to get your spending under control. Budgets change so don’t be afraid to make minor adjustments as you go along.

Why I still track my spending

You would think by now I would have stopped tracking my spending but the thing is, it keeps me honest. I love using credit cards, I’m a certified points whore so I charge everything whenever I can. Sure I pay off my balance in full every month, but when using credit it’s incredible easy to spend. There’s no money leaving my wallet, my credit card almost feels limitless, so if I didn’t continue to track my spending then I could easily go over my budget.

Credit isn’t for everyone, but did you know you can use cash to track your spending? If your budget for eating out is $200 then take out $200 at the start of the month, when you eat out use this cash only. When you start running out of money, it’s time to cut back on eating out. Okay this is actually budgeting but it’s technically tracking your spending since you’re seeing where your money is going.

Final word

No matter what stage of life you’re in, or how well you know your finances, it’s important to track your spending. Knowing where you money is vital to having a stable financial future.

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Image courtesy: thebittenword.com via StockPholio


About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi


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  3. Avatar Weekend reading - Tawcan on August 29, 2014 at 9:42 PM

    […] at Money We Have states that you should always track your spending. While it’s important to know that you’re spending less than you’re earning, […]

  4. Avatar Sean Cooper, Financial Journalist on September 5, 2014 at 5:38 PM

    Great article, Barry. Credit cards are a great way to track your spending and earn reward points, as long as you use them responsibly. That means paying off your balance in full each month. If you’re constantly carrying a balance, you’re probably better off using strictly cash. Once your cash is gone for the month, you can’t spend anymore.

    • Avatar Barry Choi on September 5, 2014 at 6:11 PM

      Hey Sean,

      Yes cash based budgets definitely have a huge advantage especially for those who don’t handle credit well.

  5. Avatar Legacy Tracker (@legacytracker) on September 16, 2014 at 8:09 PM

    Tracking where your money goes is critical. It’s a great first step to moving getting organized & moving forward with financial planning. There are free apps available that can categorize spending which takes some of the drudgery out of it (like Mint) or most web banking applications have an export feature. But otherwise, it gets easier to track every month if you do it in excel. Your efforts with tracking your spending will pay off especially when you can see the results by tracking your net worth

    • Avatar Barry Choi on September 16, 2014 at 8:28 PM

      Legacy Tracker,

      I used Mint in the past and liked it, it’s great for those people who don’t mind an app tying into your accounts. Currently I use the free version of moneywise since I’m only tracking a few minor things these days.

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