If you’re like ugh, not another lecture about why you need to track your spending, bear with me: it’s actually way easier than most other things you can do to be “good with money.”
That’s because the first step to getting where you want to go with your money is knowing yourself, which includes everything from knowing when you spend money, to understanding why you spend money, to knowing how much you actually spend.
I don’t think anyone would really argue that those things are hella important if you want to make sure your money is helping you live the life you want (and if you do want to argue it, I’m @half_banked on Twitter, come at me).
But getting to know those things about yourself – what you spend, how much you spend and why you spend – isn’t exactly something you can do in an hour or a day (sorry friends).
On the other hand, it’s definitely not rocket science, and I know from personal experience it’s not as hard as you think it’s going to be.
And the real secret sauce to doing all of these awesome things for your money? You guessed it.
Tracking your spending.
I’ve been tracking my spending for just over 18 months now, and it’s freaking magical. And if you’re sitting there thinking that it’s going to be this massive change with your money, and you’re going to have to cut way back on everything? I see you, because I used to feel the exact same way – and I was dead wrong.
The best part of tracking your spending is that you can take it as far or as not-far as you want.
If you aren’t ready to majorly overhaul your spending and your money? Tracking is the perfect first step, because all you have to do is record where your money is going.
It’s like the money equivalent of counting calories, but still eating the Ben and Jerry’s.
Come on, we all do that.
If you want to take it a step further, and make some changes to your money while you’re tracking, have at it!
But it’s entirely optional, and I’d say that’s the bonus round of tracking. Save that for month two. (Or hey, week two. No one said you have to commit for a whole month!)
So how do I track my spending?
Here’s exactly how I’ve tracked my spending over the past 18 months – and the tool I’d suggest if you’re looking to start tracking yours.
Phase One: The Basics
When I first started tracking my spending, my spreadsheet was the basic bitch of spreadsheets. It literally had three columns: what I spent, what I saved, and what I earned. And you know what? That totally worked for me.
All I wanted to get out of that spreadsheet was a detailed look at where my money was going, and a total for my spending and my saving – so I could keep track of whether or not I was saving half of my income.
Phase Two: A Sort-Of Budget
Now, I never ever thought I’d keep tracking my spending after the first few months, but when January rolled around last year, I realized I had the secret sauce to making a Real Life Budget: I knew exactly how much I spent on different things every month.
Even though I never really stuck to a category-based budget before, I decided to set one up, but to base it on how much I actually spent on different things every month (like how much I spent on my dog every month).
I took a look back at my months of actual, real-life spending and savings, and used those numbers to build a rough plan for how I was going to spend my money going forward.
It was a good way for me to keep tabs on when I was spending drastically more on one type of thing, and know that I had to pull back on other areas.
Ugh, fine, OK, it was a budget, I hear it too. I’m in budget denial. But this isn’t about budgets! (Not really, anyways.)
Phase Three: Getting (A Little Bit) Automated
That spreadsheet, which was a glorified version of my first tracking spreadsheet with a few “budgeting” numbers thrown in, lasted me for a full year, and I used it from January 2016 until December 2016.
And true confession, I’d still be using it if it weren’t for a fateful email from an awesome internet friend.
She emailed to ask if I had a spreadsheet – or knew of one – that would automatically update totals of spending based on the category she spent money in. I didn’t, but like… I want that.
I want to go to there.
Because seriously, I cannot even tell you how long it took me to painstakingly go through each of my old spreadsheets and pull out the money I had spent on things like my dog, my blog and my car this past year.
No, I actually can’t tell you, because it makes me too sad. It was so many hours. Worth it, sure, but so many hours.
So I learned some Excel, and I made the thing!
Specifically, this thing: the Track Your Spending spreadsheet.
It’s a spreadsheet that combines the flexibility I loved from my basic bitch spreadsheets, where I could literally just list my spending as it happened, with the automatic calculations that would make my life a billion times easier – including keeping track of how I’m doing on the whole not spending a gazillion more dollars than I budgeted on my freaking dog (13/10 love that expensive dogger, would recommend).
You can grab your copy for Excel and Google Sheets right here, but once you get it… how do you use it? Your budget categories are probably different than mine, so you’ll want to customize it a teeny bit.
Here’s How to Use The Spreadsheet
Well, the first step is to put in all of your most important spending categories – and yes, “other” can account for a big part of your spending in the first month until you start to see patterns. It happens to the best of us!
Once you write in your categories, you’ll find them poppin’ up in the drop-down menus under “Category.” Every time you add in a dollar amount and assign it to a category, wham bam, it gets added to your total for that category.
Excel is freaking magical you guys I love it so much.
If you want to take it a step further, you can add in a budgeted amount for each category, but can I just say, that is so optional?
My best money learning came from just tracking my spending – not trying to change it, or fit it into categories that I thought I was “supposed” to spend a specific amount on each month.
So if you want to take a hard pass on budgeting, and just see where your money goes – no judgement?
I am on that team, fam.
If you’re in like Flynn, grab your very own copy of the Track Your Spending spreadsheet.
Have you ever made the effort to track your spending manually before? Did you find anything surprising – or did it impact your money management? Let me know in the comments!
PS. Want to watch me break down my full list of fave money tools? I do exactly that in my latest video, which you should totally watch.