I find that the easiest thing for me to say is, “I’m too busy.”
I’m too busy to organize the hall closet.
I’m too busy to weed the garden.
I’m too busy to stay on top of unread email.
I’m too busy to balance my checkbook.
It’s easy to be busy, and we just get busier each month, each year. If you are telling yourself that eventually you will get around to tracking your expenses and budgeting when you can find the time, it’s not likely that it is going to happen.
It’s time to sit down and do it because once you’re set up, you can keep track in just 30 minutes a month.
Search the Web and you can find hundreds of different suggestions for tracking your money: there are thousands of websites, phone apps and applications dedicated to this. There is one simple solution that works for me: spreadsheets.
This solution will help you to:

Know where your money is goingTrack your money despite a busy lifeTrack all types of expensesGet on top of your money and your debt

Track your spending
The first step is to categorize your spending.
Make the most of online banking. When I start every month, I sit down with my friendly Web browser of choice, log into my financial accounts, and pull up their list of monthly expenses. It saves me time that the bank through which I have my checking account has a money manager that attempts to automatically label each transaction into an expense category. I do a quick review of each one and correct any transaction that ended up in the wrong category. Then I can click over to a summary page and see the amounts for each expense.
My husband and I pay for most things with our credit cards, which are tied to our checking account and automatically pay the full amount each month. This way, I feel protected against losing a bunch of cash or somebody draining our checking account, and I can fully use the banking’s online software to help me categorize spending.
The next step after categorizing your transactions is to write it down.
This is where the first spreadsheet, your personal income statement, comes in handy:
Suggestions for expense categories:

Housing: rent, mortgage, property taxes, home owners’ insurance Utilities: phone, cell, TV, Internet, gas, water, security Household: furnishings, gardening, misc. Groceries: food, toiletries, household supplies Personal: haircut Transportation: car loan, gasoline, transit, parking, taxi Health care: medication, contacts, solution, dental Dining out: fast food, snacks, restaurants, coffee Entertainment: books, CDs, recreation, movies, hobbies, memberships (gym, etc.) Child: day care, camps, activities, lessons, school fees, educational supplies, baby sitting The hardest part is getting started.
Now that you’ve entered your monthly income and expenses, you’ll see how well you spent your money this month.
Make it a habit to track your expenses regularly. Designate a time to do this and you’ll save time (by not getting overwhelmed by too much to do all at once), protect yourself (by always keeping an eye on your spending so you know if a credit card is stolen), and have good data for organizing your financial life.
Now that you’re done with your personal income statement, move on from your transactions to your accounts and enter this in your personal balance sheet. This one tracks your assets versus liabilities and tells you your net worth.
The balance sheet gives you an excellent snapshot of your financial health. Over time, you want to see that net worth number creep up as you pay off debts, save more money and grow your retirement accounts. It’s exciting and worth celebrating when you hit a big number: $10,000, $50,000, $100,000.
Know your spending habits
Tracking isn’t meant to make you feel guilty about how you spend your money or to stop you from spending anything. Spend as you normally would so that you can start to show a pattern. When you can highlight habits, you will make better decisions about spending and budgeting later on.
After I’ve been tracking my expenses over time, I now have data to look at. Here’s what I now know:
Income minus expenses over time, or the “gap.” How well are you truly spending? Do you spend less than you earn? This number should be as wide as you can manage, and if you see it narrowing, stop and review what expenses went up or income went down.
Assets minus debts over time: the growth of your net worth. You want this to steadily go up over time. The scary thing, though, has been the economic market these last few years, and I’ve watched my net worth jump off the stock market and real estate cliffs, then slowly climb back up.
My other tips and tricks:
My husband and I share most of our accounts. I know that this doesn’t work for all couples, but for us, it’s great since I have the job of tracking expenses and see it all in one place.
I set up a separate Google calendar called “money calendar.” I entered the date that a monthly expense currently occurs (like the 15th of each month) and the average amount ($80) as a recurring event. I do the same with paychecks. That way, when I check our money, I can do a quick check of the calendar and see, “until the next paycheck, what expenses will be paid out of our account, how much are they, and do we have enough to cover them all?”
Use charts. I love seeing the charts, especially the slow climb of our net worth as we carefully manage our money over the years.
Calculate your net worth at the same time each month. If you always do it on the 15th of the month, you have one mortgage payment, one electric bill payment, one credit card payment, and so on, with each reported account summary.
I don’t like to depend on Quicken or Microsoft Money because they require updating (buying a new copy every few years). I tried using Mint.com, but I had to review every transaction in there to categorize it accurately and match that to my bank account so that I could balance my checkbook, if you will.
We automate every expense that we can: rent, gas, electric, Internet, cellphones, even our gas cards. That way, I’m not worrying about dinging my credit score with an unpaid bill that got stashed somewhere in the pile.