How to Track Your Spending Like a Boss - picture of women's feet in heels on desk with laptop

How to Track Your Spending Like a Boss

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Want to handle your finances like a boss? You’ve got to learn to track your spending.

Just like most things in personal finance, tracking your expenses isn’t particularly complicated. It doesn’t take a genius to do it right. But, implementing those steps can be a real pain – especially if you don’t know where to start.

Thriftaholics, we’ve got your back! Anybody can learn how to track their spending, and all it takes are a few basic items. In the following piece, we’ve outlined 3 different methods for tracking your expenses. At one time or another, we’ve used them all. Check them out, track your expenses, and let us know what you think!

Why Track Your Spending?

Tracking your spending is one of the most important things you can do to improve your financial situation. Whether you’re in debt, learning how to budget, or just looking to maintain a healthy bank account, knowing where your money is going is key to realistically understanding your financial well-being.

By tracking your expenses, you’ll get a clear picture of exactly how the money you make is being spent. One of the things I’ve learned over the years is that most people just aren’t very good with money. Many of them think that, as long as they’re able to pay their bills, they are on budget. Unfortunately, after their bills are paid, those people usually bleed money like a stuck pig. They have no clue where it’s all going.

Welp, that’s just plain silly. If you’re going to supercharge your savings, you’ve got to make better use of the money you already have. Most people have more than enough to get by, they just don’t realize it because they don’t know how much they’re wasting.

[bctt tweet=”When you’re not watching over it, #money mysteriously disappears. Stop spending. Start living.”]

That’s an easy fix: Track your spending.

Our Story

We’ve fallen victims to this same mindset. We were in debt, making a decent living, but hardly saving, we needed to know the best ways to save money to get a handle on this! In our minds, we were some of the most frugal people we knew. Heck, our wedding even cost less than about $3,000 – total! But, reality showed us that we were blowing money every day on things we really didn’t want or need.

About a year after having our first child, Holly and I looked at each other and decided that enough was enough. We started tracking our expenses and found gobs of money just flying out the window! Our cable bill was well over $100 a month. Our random spending was basically unaccounted for. And the biggest surprise of all was that we were spending over $1,000 every month on food…for 2 adults and a baby. It was ridonkadonk!

We immediately found ways to cut our expenses and continued tracking our spending to keep us accountable. For the first time, we also created a budget. We took the extra money we had been wasting, threw it at our debts, and before long we were debt-free (except the house).

We’ve continued to track our spending and create a monthly budget. Honestly, these two tools have made a gigantic difference in our life. By using them to put our financial house in order, we’ve gained the ability to take risks – risks like quitting our jobs, working for ourselves, and traveling the world…all in a span of less than 5 years.

3 Free Ways to Track Your Expenses

Once we got our money together, you can see that our lives totally changed. It all started when we got serious about tracking our expenses and sticking to a budget. Those two simple tools helped us make the switch from unknowing overspenders to conscious supersavers. We started saving massive sums of money each month – money we didn’t even realize we were wasting.

Tracking your spending will help change your financial life too! Here are 3 legit methods to get this done:

  • Pen and Paper – Yup yup! All you need is a pen and paper to make a change right now! I’d use two sheets to do it. We’ll call the first sheet your “Spending Journal.” There, make three simple columns: Name of Expense, Category, and Dollar Amount. (Categories should include things like entertainment, food, savings, etc.) Every time you spend money, jot it down in your journal. We’ll call the second sheet your “Monthly Expense Record.” On this, create two columns: Category and Total Spent. At the end of the month, use your Spending Journal to add up how much you spent according to each category. Then record it in your Monthly Expense Record. Boom! You’ve just tracked your monthly expenses!
  • Create a Spreadsheet – An even simpler way to track your expenses is by creating a spreadsheet. You still have to manually add all of your expenses to your Spending Journal. However, the spreadsheet can total your categories for you. That way, you’ll have a rolling total of how much you’re actually spending during the month. We’ve got a budget and expense tracking combo spreadsheet available if you join our VIP Club. Click here to get it!
  • Automate Your Tracking – The easiest way to track you expenses is to link your accounts to an automated app like Personal Capital. Once you connect your accounts, the program automatically tracks your spending by store and category. After it’s set up, PC does all the heavy lifting for you. Personally, we use this program all the time. However, if most of your spending is in cash, this may not be the best tracking program for you. That being said, follow the (affiliate) link for more info on Personal Capital’s free tools!

Now What?

So, you’ve successfully tracked your expenses for the first time. Now what should you do?

Fist of all, congratulations! You’ve already done more to improve your finances than most people ever will. Give yourself a pat on the back for taking action.

OK. With that out of the way, it’s time to do a complete autopsy on your spending. You might find yourself in a little state of shock right now. Those totals can be a bit overwhelming at first. When you’re not watching over it, money mysteriously disappears. It’s a truth we’ve all learned at one point, so you’re definitely not alone.

Freaking out is good! You have cause to freak, but don’t beat yourself up over it. Use that feeling to make some changes to how you interact with your money.

After letting reality sink in, it’s time to look for ways to cut your spending. Comb through your list of expense categories, and determine which expenses are necessary and which aren’t. Be honest with yourself, and determine how much you can trim off that total each month.

There are plenty of ways to save money, such as shopping via cash back sites such as ebates, check out our Rakuten Review to learn more, you just need to commit to doing it. Bust out your carving knife, and slice your spending to shreds. Attack your “wants” first. Then, look for ways to trim your needs as well.

To really supercharge your savings, try saving until it hurts. It may be painful at first, but you’ll quickly get used to your new spending habits. And, as your savings begins to grow, you’ll almost certainly love the changes you’ve made!

Keep it up, and do it all over again next month!

Go For It!

Welcome to the first day of your new financial life. You’ve totally got this, and we’re behind you to cheer you on!

We are super stoked to hear about your expense tracking results! Honestly, once you start to track your spending, cutting your expenses becomes pretty addictive. When you see progress, it motivates you to do more and more.

We can’t wait for you to give this a try! It really doesn’t matter which method you choose, just take action. Use any one of these methods to start tracking your spending right away. Once you do, you’ll be well on the way to supercharging your savings!

This is the second piece in our “Supercharging Your Savings” series. Below is a complete list of pieces in the series. Enjoy!

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  1. I’ve read a lot of great things about Personal Capital. I may give it a try if it’s totally free. Can I link my 401(K) and online savings account to it as well?

  2. I generally just don’t buy much of anything. But a couple months ago I started a google spreadsheet budget, and then utterly failed at keeping track with it. I really like personal capital, A LOT, but it wont really break down what you bought, if you run to Target, it wont tell you if $50 was groceries and $20 was toiletries. That was the kind of details I’m curious of my actual spending habits. I think I’ll have another go at trying to budget and analyze, Thanks!

    1. I use Mint myself. When the charge goes through for Target, I go in and manually split the transaction into the categories I need them in. So, $4 for groceries, $16 for household, and $20 for cash. It’s a little fiddly, but I don’t go to Target every day.

  3. This is a great post. My wife and I were on the same boat as you guys were back in the days. We told ourselves that since we were frugal, we didn’t need to make a budget and track our expenses, which were our biggest mistakes.

    When we had our kid, we decided to re-visit our money in the savings and closely looked at our expenses. The result wasn’t good. We were spending more than what we needed. We decided to take control of our expense situation and was able to bring our expenses down.

    I thinking a lot of frugal people make the assumption that since they are frugal they really don’t need to look closely into their budget and expenses. I believe that regardless of how frugal a person is, he/she still needs to have a budget and keep track of his/her expenses. A few change here and here can add up to a few dollars, which can add up to a hundred dollars later on.

  4. I didn’t start living a frugal lifestyle until about 15 years ago and at that point I wasn’t tracking my spending. It wasn’t until I met my wife, a self-proclaimed tracking fiend, that I joined her in using Quicken to keep all our records. Now, I can’t imagine not knowing exactly where our money goes. Even though we have the option to download our transactions automatically, we still prefer entering them manually as it keeps us very aware of how much we’re spending as we go. But the most important thing is to find a way to track that works for you.

  5. I’m a big fan of Personal Capital. I like it better than Mint. The only downside is the occasional calls where they try to get you to sign up for their investment advisory service. It would be good for most people, but I can manage my own money just fine in low-cost index funds just fine without the added expense of an advisor.

    The iPad/iPhone and website user interface is pretty great too!

  6. I started with pen and paper, but when I transferred to spreadsheet, I felt I would have a greater opportunity and chances in achieving my financial goals. And, I did and must say that it’s easy to plan and strategize because spreadsheet is more in detail and easy to adjust on the bases of the plan I need to execute.

  7. Wow, really interesting article! Thanks for the great advice! Budgeting is so important, but can be really difficult so having a plan like this one is definitely key.

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