Financial Freedom: How to Track Your Spending

Financial Freedom: How to Track Your Spending

How much money do you spend each month? Many of us have no idea. All of those “quick stops” to the market, happy hours with friends, (and let’s not even talk about Target) add up to more than you would think. If you’re not tracking your spending, you cannot manage your money. Once you crunch the numbers, you may be surprised to see where your money is actually going and how it could be reallocated to saving, paying off debt, or investing.  One of the first steps towards financial freedom is getting a clear understanding of where you are right now.

So this week, we are going to work on tracking your spending. You may be able to add up your bills and say these are my monthly expenses, but chances are your daily spending habits go outside of your bills. Coming face to face with your spending will incentivize you to set goals for saving and/or paying down debt. There are a few ways you can get started. We’ll review them below.

Tools to Track Your Spending

  • DIY Excel Spreadsheet aka Ol’ Faithful: You can track your spending yourself on a spreadsheet by going through your bank accounts and credit cards. To make it easier for you, I made a spending tracker for you. All you need to enter are the amounts and any miscellaneous expenses. You can remove anything that doesn’t apply to your spending habits, as well. If you’re already subscribed, you got this in your inbox already. If not, you can enter your email to download yours below.
  • Apps: Of course, there are apps that you can link your accounts to to track your spending for you. If you are going to use an app, be careful to read the fine print in case there are security breaches. Banks and apps are likely to put the liability on you when linking your accounts to such apps. Also, if you like to spend with cash, you’ll have to enter cash transactions manually. Here are two popular options:

I, personally, prefer the ol’ faithful do-it-yourself method, because I’m enjoying getting into the habit of being attentive to where the money in our house is going. It encourages me to be more cognizant of our spending habits. Tracking your spending by hand can be a tedious task at first, but definitely eye-opening. Once you get into the habit, you can spend 20 minutes every day or some time on the weekend to track your spending. This is a habit that the wealthiest people (not the richest, there’s a difference) in America have and one that can teach you to be more mindful of your spending choices.

For couples (who live together), I encourage you to do your spreadsheets together. I was confused at first at whether I should do separate sheets for Terry and I, but we’re one household so one spreadsheet made the most sense. It’s good to get on one accord when your sacred space, your home, rely on each other’s spending habits. Even if only one of you is bringing in income, accounting for everyone’s spending habits are imperative. Find a good time to sit down together and get transparent about the household’s finances. Use this time to set clear guidelines on who’s responsible for paying bills and tracking the finances, if you have not already.

I recommend going back at least one month, so beginning with September, and tracking your spending from there. Ideally, by the end of October you’ll have analyzed your spending, found room for savings, and created a realistic budget.

Remember, don’t let this task daunt you or get you down. If you see you’ve been a little frivolous or irresponsible in some places, that is okay. You are now taking the steps to create better spending habits and financial freedom in your life. This is a cause for celebration. I’m proud of you for taking this step!

Come back next week for more as we go on this journey to financial freedom together.

Happy Number Crunching,


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