Do you have any tricks to ensure that you track your money?

July 17, 2006 10:28 AM

Do you have any tricks to ensure that you track your money?

I would like to track what I spend and what I spend it on. I have MS Money 2006, but I hardly ever use it. I could use Money, but I find it hardly ever categorizes everything correctly. This is really more of motivation thing then a "how to" or "what's the best system" question.

I've thought about just using checks, but that would be giving up the convenience of my debit/cards (plus the tiny percentage money back I get for using them.) I use my cards for everything. I save all my receipts in my wallet and empty them into a manila envelope when my wallet starts to feel too big - which could take a few weeks - . I would like to go thru my receipts and itemize everything; the problem is getting around to doing that.

I've also thought about keeping my debit/credit cards in my receipt envelope and until I put those receipts in the system (spreadsheet or MS Money or a logbook) I would have to use checks (that I would keep in my wallet) until the receipts are put in the system. Does anyone have any better suggestions then this?

posted by bigmusic to Work & Money (19 answers total)

I check my online banking obsessively.
posted by k8t at 10:33 AM on July 17, 2006

Excel spreadsheet, three columns. One is estimated or budget, the second is what is spent so far in this period, the third is what is remaining. I have formulas set up so the numbers work automatically. I track by paycheck, not by month. Its still hard work.
posted by Ironmouth at 10:39 AM on July 17, 2006

Have you read Your Money or Your Life? It offers many suggestions for this sort of thing.

I haven't used MS Money, but could you create your own categories better suited to your spending habits? Many of the default expense categories on those apps seem geared towards hypothetical users as opposed to real ones. Try to create the most specific categories you can think of. Don't use "Entertainment" as a category, for example. Use: "Movie (Rental)", "Movie (Theatre)", and "Movie (Student Film Night)", or whatever works best for you.

As for getting in the habit, well, you'll just have to practice. Save all your receipts, and for receipt-less purchase write down the amount, because you will forget. Enter them into your system at the same time every day. Once you get your system and categories set up, you shouldn't have to spend more than two minutes a day entering things.
posted by Succa at 10:39 AM on July 17, 2006

Further to k8t's suggestion: I use my debit card almost exclusivley now. My bank (Wells Fargo) is fairly feature-rich in its online offerings including auto-categorizing my expenditures - which it mostly gets right. Its also integrated with MS Money and Quicken.

I'm not so much pushing this particular bank, as suggesting you find a way of doing all this electronically and forget the paper receipts.
posted by vacapinta at 10:47 AM on July 17, 2006

Pearbudget
posted by Maishe at 10:49 AM on July 17, 2006

Thanks everyone that has suggested systems to use so far, but I am not really looking for a particular system unless there is a part of the system that ensures you track your spending.
posted by bigmusic at 10:57 AM on July 17, 2006

I get a lot of utility out of using Excel on a PDA; I've currently got a Palm LifeDrive, and I'm using a spreadsheet I wrote that simply captures date, a category from a drop down list (e.g., eatingout, taxi, etc), the amount and a variable length description.

I also have a budget spreadsheet so I can compare my actual spending against planned. You've got to develop the habit of entering transactions but it does payoff - most months I manage to save about 65% of my net pay simply because I know how much it costs me to live and where my discretionary money is being spent.

I realise that there are applications out there that do this but they almost always cost money! And on a more serious note, I can run my budgeting on any PDA or notebook computer with Excel or a compatible spreadsheet.
posted by Mutant at 11:04 AM on July 17, 2006

The most important thing is to do what works for you. There are optimal solutions, and there are good solutions, but the best solution is actually the one that you can make a habit.

That said, what I do is: collect all my recipts in my wallet over the course of the week. Sometime over the weekend, I sit down and enter all of the receipts into Quicken. If I have to write checks, I do so at this time and then record them in Quicken. I try to pay my bills before they're due so that I don't write checks mid-week and then forget about them. During these weekend sessions, I perform a rough balance check to compare numbers with my bank. This helps me catch anything I've missed, and it helps me remember to enter on-line transactions. When my bank statement comes each month, I reconcile it. I spend maybe 10-15 minutes each weekend on my finances, and another 10-15 minutes to reconcile my statements once each month.

Seriously, though: the best motivation is just to do it. Find a method that works for you, and do it. Some people enter their data every day. Some do it once a month. The most important thing is to actually track the data, though.

The only way to ensure you track your spending is to actually do it.
posted by jdroth at 11:31 AM on July 17, 2006

No piece of software or paper can force you to meticulously record your transactions. This falls in the realm of behavior and habit, and it's something you'll need to work on yourself.

While we don't currently do it, my wife and I tracked every penny for a few months. It turns out this really wasn't that hard as long as we A) saved every receipt, and B) logged them at the end of every day. Probably took 3 minutes/day or less. We weren't using any special software--just a simple Excel spreadsheet I rolled.

Very few transactions don't result in a paper receipt—gumball machines and a few others. So avoid gumball machines. The physical receipts are your aides mémoire. Just stuff them in your pocket and unload them at the end of the day to record them.
posted by adamrice at 11:34 AM on July 17, 2006

The system I use (which also helps with the motivation) is Quicken combined with excessive use of a debit card. Virtually all of my spending is done with a debit card, which means that I can track through online banking where I spent the money. From there, it's pretty easy to categorize things and sort out where the money goes.

Basically, I do my best to make the system as easy and mindless as possible - if I don't have to think about it, I'm more likely to actually follow through.

What helps is that Quicken automatically tries to categorize transactions based on previous transactions, so if I go to the grocery store this week and categorize the purchase as "food:groceries", it'll automatically put future purchases from that store into that category. I don't shop at too many different places, and most of my purchases from a given store fit nicely into a single spending category.
posted by gwenzel at 11:42 AM on July 17, 2006

Here's the problem I see with what you're doing right now—you're letting the receipts pile up to the point where it may become an overwhelming task just to go through them, remember WTH you bought at this, that and the other random shop or restaurant, and then categorize them. Here is what I think you should do—at the end of each day, or even at the end of each outing, when you return home, log every receipt. You'll probably have three or four at most, and it'll be a very easy small task.

'Cause yeah, I do exactly what adamrice and his wife used to do—I save my receipts each day, and if I buy something that doesn't provide a receipt (say, if I go to the farmer's market or buy a brownie at work), I make sure to write that down on one of the other receipts in my purse.

As soon as I get home, I go straight to my Mac and log all expenditures and paychecks/tips in Cocoa Account Plus (free Mac software that keeps a very simple tally of debits/credits/overall totals/spending categories). Because I'm one of those people who gets paid by the hour, I also open up a Word document I keep on my PC and log how many hours I worked that day and for which job (of the three I'm working) so I can get a rough idea of how much money to expect coming my way in the next paycheck.

This all takes no longer than five minutes.

I just do it every time I return home from an outing that involves spending money, or make sure to do it first thing in the morning if I'm too exhausted to stay up a minute longer. So far I've kept meticulous track of every penny spent since June 1st of this year, and it's been rather useful. I'm building up a record of my spending habits, and tracking it by category so I can definitively say where my money is going.

I used to do what you do, you see. For the year prior to June 1, I pretty much just spent money with my debit card, then stockpiled the receipts. I'd check online to make sure I was charged the right amount, but besides that, I wouldn't keep track of my finances in any sophisticated way. Doing that, I managed to spend more than $2,000 on eating out, movies, and things I didn't need over the course of about an eight-month period. Now that I'm supporting myself, I realized I needed to keep track of this stuff, lest I run out of money entirely. Thus...tracking.
posted by limeonaire at 12:03 PM on July 17, 2006

Yodlee. Amazing site. Their software is what many bank companies use for their online banking. When you use their software from their own site, you can easily aggregate lots of different data--banks, credit cards, investments.
posted by sdrawkcab at 12:04 PM on July 17, 2006

I second the PDA + Excel suggestion, which is what I use. Of course there are still bills that slip through the cracks--like my public transit card, that helps itself to $20 from my bank every time I take the train too many times. I really like this, because I never have to worry about having train fair, but I can't tell you how many times I've kept perfect records of every transaction, only to get hit with overdraft fees anyway. The Hive Mind suggested that I do whatever it took to keep a buffer in my bank account, and this has really helped.

I also second the notion of checking your account online as often as possible, although beware of personal checks that wait until you have no money before finally getting cashed...

But your question, really was about a tracking system, and I think that a simple spreadsheet program on a old cheap palm pilot is better than compiling receipts later on.
posted by Squid Voltaire at 12:10 PM on July 17, 2006

Echoing others above, if you can use mostly your debit card, you can use your online banking transactions to track what you spent. You can do this with most credit cards now too. I understand that you want something separate that is going to add everything up and categorize it, but you could use the online banking to replace the receipt saving part of the process. Rather than cramming them in your wallet, sit down at the PC and enter the data from your online banking website into a separate excel sheet or the program of your choice. Wallet busting receipt problem solved, and easy to keep on top of. You don't have to worry about losing the receipts, so you can do this once a week on the weekend or something and still track every penny. It even records your cash withdrawals.

If you're really against using the online banking (mine is great, though. I use it religiously), do what my mom does. Carry a small piece of paper with you (use the balancing section of your checkbook, or carry a small flip pad) and simply write down the amount you spent and where you spent it. Make it a habit. Go to the grocery store? Write $25.15 -- groceries. Then you'll have a list of all your expenditures that you can enter into a money tracking program. Or, you could do as others suggested and enter the info into your palm at the time of purchase. This relieves you from having to chase down receipts later on.

FWIW, I think online banking is far easier than the second suggestions.
posted by theantikitty at 12:44 PM on July 17, 2006

I still check my totals against my online banking statement regularly, especially after running up a big bill on a purchase. But I do want to caution against just passively looking at the online statement and not actively categorizing these purchases and deposits into one's own record system. (Not saying that you passively use your online banking this way, theantikitty—just making sure the OP clearly understands.)

I think a key idea here is actively monitoring your finances, rather than assuming they're correct. Making sure everything matches up correctly, and that any budget forecasts will be met, is important.
posted by limeonaire at 12:57 PM on July 17, 2006

I do my best not to spend cash, since i'm more likely to lose track of 1 dollar bills than "accidentally" debit something.

I also keep all my bills in a folder labeled by month. Its a lot less organized than my mothers alphabetic time-factored system, but it allows me to find what I need, and keeping track of recipts helps me see how much I'm spending, plus I have them if I need to return stuff.

Your bank may have what mine did, which is a tiny bank-book the size of your debit card, with a plastic slot for the card to fit in. Then, stick it in your wallet. You have to pull it out to use the card, so while the register is running, make an entry. Simple!
posted by gilsonal at 2:26 PM on July 17, 2006

Why can't you download a list of debit/card transactions from your bank's web site? My financial institution (a credit union) lets me download my credit card transactions into a CSV file. I open the file in Excel, sort the transaction list by merchant, and then categorize the expenses. I then total the amount spent by category. My system is very simple and only has two categories, as I am only using it to track renovation expenses vs. other expenses. I do this once a month, and it takes me 10-15 minutes.

I find that even this simple system is very effective. Almost all of my transactions are done by credit card, and I spend $40/mo or less in cash. If I make a frivolous purchase at a frivolous merchant, I'm forced to look at it once a month and see how it fits as a % of total spending. The main downfall of this system is that the grocery bill is a black hole. I mentally auto-approve grocery spending, so I don't think about how I could improve shopping/cooking/spending habits.
posted by crazycanuck at 2:48 PM on July 17, 2006

A writer said that the way courage works is, first you do the thing you're afraid of, and then afterwards you get the courage. Same principle here: First you do the thing, and then afterwards you get the motivation.

JDRoth is right: You've just got to knuckle down and do it. There isn't any magic shortcut. Once you get yourself into the habit of tracking your spending, you'll find that two things happen: (1) Having established the habit, it will be easier to follow; and (2) You'll get addicted to the information you learn about yourself from doing the work, and that will motivate you to keep going.

"Act as if you have faith, and faith will be given to you." Mind follows behavior. Just do it, and your attitude will fall into line.
posted by cribcage at 9:47 PM on July 17, 2006

As you've found, starting a system is easy, but keeping it going is hard. What we do:

--Stay inspired. I read personal finance books not only for the information, but for the motivation.

--Change the system, even if just a little. Go from writing everything down in a little notebook in your back pocket to writing everything down on a sheet at the end of the day to collecting receipts...you get the idea. Don't change often, just when you find yourself forgetting the old method.

--If you have a partner, trade duties. The Spousal Unit is keeping track right now. I may take over again next year.

--Finally, keep some kind of visible chart of your progress. I recommend the system in Your Money or Your Life. Keep that chart somewhere you'll see it, and it will keep you moving forward.
posted by frykitty at 8:03 AM on July 18, 2006