Exactly Why (and How!) You Should Track Your Spending

Exactly why you need to track your spending - and how to do it, with a free spreadsheet.

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.

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!

Here's where you can edit the categories in the track your spending spreadsheet.

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.

Here's where you'll find the categories in the track your spending spreadsheet.

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.

Get your 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.

Desirae is on a mission to demystify and un-boring financial info for millennials, so that we can all save more money, spend on stuff that matters to us, and still have a latte or two along the way. Money is literally why we can have nice things, and Desirae is committed to helping make sure you know just enough to make the right calls for you. (She’s also committed to her expensive dog, her side hustle, and her retirement fund.)

31 Comments on “Exactly Why (and How!) You Should Track Your Spending”

    1. Desirae

      I feel the same way – better late than never though! I’m sure you’re already finding value from the time you’ve been tracking (there’s a later comment about feeling that jealousy about people who have been tracking forever, and I feel like most people have that when they get started! I certainly do!)

  1. Penny @ She Picks Up Pennies

    So, true confession time: my budget is a Google sheet that I copy and paste from month to month. And have done so since 2015. The only numbers I adjust are when our homeowners insurance/car insurance/taxes go up. I don’t even try to guess what our heating bill or electric will be. I just have a ballpark number, and it serves me well. As you said, the value is in the tracking more than the budgeting. Though I realize how fortunate I am to be able to say that because we are able and willing to cut from flexible categories if something comes in really high for the month.

    1. Desirae

      Totally – I never really forget how much of a privilege it is to have a high enough savings rate that going over budget is an inconvenience, not a hardship! (Like I’m sure you felt with your poor food budget – I LOVED your post, lol, but also felt so sorry for you, that must have been frustrating in the most loving way possible!)

    1. Desirae

      Thanks so much! There can never be too many spreadsheets – I don’t even want to admit how many different templates I’ve tried out, haha.

  2. John L

    This. Is. Scary.

    It seems you have gone through the EXACT same thing I have been doing for the EXACT same timeline. I started doing this June 2015

    I use google spreadsheet though, so at least we have one difference.

    I do the same – Track expenses using the following columns: Date|Store|Category|Cost|Description|Payment Method. This list keeps going from month to month, year to year. I actually linked it to a google form that updates it so I can easily do it from my phone so that I don’t spend too much time. Just need to open a webpage and fill in the info.

    Then I have a sheet that summaries all in one for “per year” and “per month”. The “per year” column is an average of all the months. I liked the “per year” column because I noticed month to month things varied very much such as groceries – I like to stock up on sales and when meat goes on sale needless to say my freezer is full! This helps analyse things a little better.

    I ended up enjoying the yearly averaging that I thought it would be handy to create a page that shows my average since keeping track of the expenses. This worked well for expenses that didn’t occur every year such as house renovations and buying a vehicle. This gave me an average I require to save if I wanted to continue living the way I had been in the past.

    The last feature I added was not as impressive but helped give somewhat of a perspective. I broke down my Bill category by “store” (or rather company) to give me an average of what I pay on each Bill per month and per year.

    Yes – I am a freak. But you have made me feel somewhat more normal after reading this post. Or maybe you’re just a freak too.

    1. Desirae

      Hahahaha tracking freaks unite! While I definitely wouldn’t say we’re normal, I would say we’re doing it right (like people who are just super fit all the time, but the money version. It’s not normal, but it’s definitely good!)

      And I’m super curious: does tracking your payment method give you any valuable data? Or are there many differences in how you pay for things? I have to admit I’m a credit card ride-or-die. I funnel almost everything through that or email money transfers, so I don’t think I’d ever have many different payment methods.

      1. John L

        Tracking payment method is actually for a totally different reason – I go through my Visa/Mastercard bills quickly to ensure all the charges add up, the column is simply there to allow me to filter! This has two purposes:

        1) see if any fraud charges are on my bill
        2) see if i am missing anything on my spreadsheet

  3. K

    Thank you for sharing this spreadsheet! I have been tracking my spending for the past few months (inspired by your blog) but find my basic spreadsheet lacking and a bit of a bitch to update. I must admit, I’m a dummy when it comes to Excel. So thanks for sharing yours. I’ll be using it starting next month 🙂

    1. Desirae

      Thank you so much K – I hope it ends up being useful! Let me know how it goes when you start using it! (And seriously, don’t feel bad – my first version was such a pain too! I think that’s just where we all start with spreadsheets, haha.)

  4. Kira

    I just found your blog last week and I have got to say you have some amazing tips. Even if it’s as simple as track your spending. I have never really done that before and just started to this month and… wow. That’s all I have to say. Clearly my spending is a little out of control and I had no idea! But, at least now I know where it’s going (just got a pupper in November so safe to say lots of toys, vet bills, and food) and I can cut back on certain areas.
    Your spreadsheet is really fantastic and I am so thankful that I can easily track my spending to help guide me on areas to cut back in order to increase my savings. I am getting married this summer and could really use some extra funds for that. 🙂 Thanks again for sharing your experiences! I am definitely learning a lot about my finances from reading about yours.

    1. Desirae

      Awwww Kira thank you so so much for the sweet comment! I really appreciate it – and omg congrats on the new pup! (Are you on Twitter? Are we friends there? Send me photos of the dogggggg!) (This is me, hoping that you’ve already read the posts where I self-identify as a crazy dog lady, haha.)

      I’m so so so glad tracking has been helpful so far, and I hope the new spreadsheet makes it even easier! You could totally save a copy to use for tracking wedding stuff too, with wedding-specific categories if that would be useful.

  5. Erin

    What I wouldn’t have given for this spread sheet in November!

    After finding your blog (and reading, and reading, and reading) I created at first, a very basic expense tracker. Like you, it’s basic-ness suited me…for a while. Fast forward to Christmas break, and I managed to hone my excel skills to create a work book complete with my budget guidelines and a breakdown of my recurring and anticipated expenses over the next year!

    Really enjoy your blog and definitely already feel like I’m headed for a better financial state in 2017. Thank you!

    1. Desirae

      Oh Erin that’s so awesome! And can we just take a moment to bond over our shared “What did you do over the break?” “Uh… Excel.” experiences? Because for real. Soul sisters. Thank you so so much for the kind words – I’m sorry it wasn’t around sooner!

  6. fbgcai

    great post! – I’ve been tracking expenses for a looooong time – now a fully ingrained habit.

    I have a slightly different approach to data capture.

    Simply an 8×10 paper sheet with the categories for daily expense capture (10-20 secs daily) – just the amount per category eg. I bought gas ($10), coffee ($2) groceries ($25) then those number go in the appropriate category line. To make sure I capture all the expenses I have personal rule that every purchase must generate a paper receipt (even if I create it) – has the advantage of attaching a physical thing to an expense and since I was self employed it also assured business expenses had documentation – they were tracked separately in a parallel system. Using paper capture also lets you check if you have already captured an expense or missed one (reconcile those receipts!).

    Then monthly I transfer the category numbers to a spreadsheet (~10 minutes) which does the summing up for the category and totalled by month and YTD. This also allows a quick review and capture of missed expenses if any – i.e. stuff paid by PAD

    Yearly simply create a new empty spreadsheet and 12 new capture sheets. and see how you did against budget, if you have one – personally I do not use them.

    I did go one step further after a number of years of data and aggregated to total expense over time – BIG scary numbers ! 🙂

    1. Desirae

      Hahaha I can only imagine how the years must stack up! I know my mom has been tracking for most of her working career, and can tell me exactly how much she has earned, and how much of that she kept. It’s amazing to see the real-life numbers over a long period of time!

  7. Making Your Money Matter

    I have to admit I’m jealous of people that can casually say “hey, I’ve been tracking the last 15 years of data on Quicken”. We do have a good 5 years of expense tracking, which has been all over the place due to a couple international assignments. My main reason for tracking my expenses was to be able to answer my husband when he asked “we only have how much money in savings? What did we spend it on?” The answer was travel. It was a little bit here and there but really added up! By tracking our expenses, we were able to make sure we minimized spending on things we didn’t care about (name brand anything including groceries) to maximize the areas we wanted to spend more on (yep, travel).
    Love the spreadsheet!

    1. Desirae

      That’s so awesome! And yes yes yes yes yes to prioritizing spending on the things you care about.

      Plus, with five years under your belt, you’re the people I’m jealous of! Haha I do for sure know what you mean though – I read a profile a while ago where someone looked at trends in his 12 years of data and it was amazing. It helps me stay motivated to keep going, because I know I’m going to want to be that old lady who can tell you how much she’s spent in her lifetime on dogs!

  8. Money Beagle

    I have always felt that many people have the best intentions when they start budgeting, but they often fail because it’s too complicated. Why? Because they try to do too much too soon. This is a GREAT way to overcome this.

    Have a great weekend.

  9. E

    I did something very similar for years until I had a kid, then all my time went out the window. But I should really start again. I like the idea of google docs, so it’s easy access from anywhere.

    I guess some of my biggest personal surprises was the amount spent on gifts. Which is not a category i would have even considered “budgeting” for, but there’s b-days, random gifts, things you bring to visit friends, etc.

    Tracking was an eye opener. Just to even be more aware of how you’re spending your money!

    1. Desirae

      Right?! You’re on track for your budget, and all of a sudden you’re like right, my three best friends were all born in the last week of this month. There’s gifts, and cards, and meals out, and bye, balanced budget. It’s a weird thing to “budget” for too, but being aware of typical patterns (even over the course of a year!) can make such a big difference in managing it.

  10. Jennifer Connolly

    My husband and I just started to get serious about debt repayment this year. We are tracking everything we spend on now. My husband added up all the take-out and restaurants last year and I nearly fell off my chair, such a waste of money that could have been used to pay down a debt.

    1. Desirae

      Hahaha right? Those “total spent in a year” numbers really put things into perspective for me too! Congrats on tackling your debt too – that’s a big commitment and no easy feat! Kudos!

  11. Emma

    Hey just a question just trying to get this sheet and the email link didn’t work for me. Any suggestions? Thanks

  12. Stephen McCullough

    Hi Desirae,

    Great and helpful post. I’ve tried tracking a number of ways, including a primitive spreadsheet. Your seems to be what I need, but the link doesn’t seem to work. Is there another way to download it.

    Keep going!
    Stephen

    1. Desirae Odjick

      Hey Stephen, I’m so sorry to hear that it’s not working – my apologies! Are you not seeing the popup form when you click on the links in the post, or is there an issue with the link in the delivery email? If you’d prefer to shoot me a note at hello@halfbanked.com I can help troubleshoot!

      Desirae

  13. Lauren

    Hi Desirae,

    Can’t thank you enough for this spreadsheet and all of your tips! As an Excel newbie (unfortunately), I’ve been trying to figure out how I can delete categories so that there aren’t as many. When I try to do it, an entire row deletes (with my spent expenses on the other side) and if I leave the blank categories there then my spending doesn’t add up for some reason. Can you help me?

Leave a Reply

Your email address will not be published. Required fields are marked *