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How to Stick to Your Budget: Track Your Spending

How much do you spend in an average week? An average month? If you have no idea, it’s hard to know whether you’re spending more than you earn, or if “minor” costs, like that daily coffee, are adding up to a lot more than you think. Follow these tips to get a better sense of where your money is going. 

1. Give It a Week 

For seven days, write down everything you spend, down to the last stick of gum. When you’re done, categorize the items from your list and your bank account based on what they are for: housing, food, entertainment, transportation, etc. Include expenditures in cash, by check, or made electronically using a debit or credit card. Do you see opportunities to trim costs in some places? Are you devoting too much to one type of expense? For an even deeper dive, try tracking for a full month.  

2. Be Honest 

Your tracking list will give you a lot of great information you can use in your financial decision making, but only if it’s accurate. Remember that you’re the only one who has to see it, so don’t fudge the details! To make an effective monthly budget, you’ll need solid information on your spending and expenses.  

3. Get the Right Tools 

Think it’s a hassle to write down everything you spend? Make it easier by keeping a pad and pencil with you, making notes on your phone or using an app designed to do it for you. 

4. Give Yourself Incentives 

If tracking seems like a pain, remember why you’re doing it. Cutting unnecessary or excessive costs can leave you with more money to lower your debt, pay for a great vacation or save for long-term goals, like a child’s college education or a secure retirement. Motivate yourself by focusing on your dreams. 

5. Be Realistic  

If you love going out with friends on the weekends and it fits in your budget, you don’t have to deprive yourself, even if the cost is a little high. You’re allowed to have fun, and cutting yourself some slack occasionally will help you to stay disciplined the rest of the time.  

6. Repeat Regularly 

Now that you’ve seen how easy it is to track expenses, consider continuing the process to get a month’s worth of information. You might even want to make it a regular habit. If you don’t, keep in mind that dieters often do a great job of cutting out unhealthy foods at first, but may find themselves slipping over time. In the same vein, even the most disciplined budgeters may end up splurging a bit more as the months go by. Resume your tracking from time to time and monitor your budget regularly to be sure you’re on target to meet your goals.