Track Monthly Expenses and have Personal Finance Success

Tracking monthly expenses.

Surprisingly, this is the one thing I did correctly long before I had my entire financial act together.

I believe I started doing this around the fall of 2001, when I moved to Texas. It was very simple. I just listed out the days of the month in Excel and put the names of my expenses on the date they were due.

Tracking your monthly expenses is a great strategy for improving your finances. It helps you get a clear picture of every dollar you’re spending, helping you make smarter money decisions.

Why I Tracked My Monthly Expenses

I decided to track my expenses so that I could:

  • Always pay bills on time
  • Have a better idea of my monthly expense needs in order to know how much I needed to earn
  • Determine how much I truly needed to spend each month and find expenses I could cut
  • Figure out how much I could spend on non-essentials after the bills were paid

Here’s a pic of the tracker I used:

PTMoney Monthly Tracker

Download the Monthly Tracker

As you can see, it’s not complicated, but it does the trick. You’ll notice that I’ve added columns for Savings and Income. This simple tool helps us to visualize our financial framework and put everything that impacts our finances into perspective.

You don’t have to use Excel. You could very easily track your expenses the old-fashioned way, with just a pencil and paper, if you like. Plus, there are plenty of digital tools that help people to track their monthly expenses with ease.

Why Not a Full Budget?

One thing to note is that with this tool, we’re not tracking ALL of our expenses. This is not a full-blown budget. A detailed budget may not be worth the time and effort for everyone.

The purpose of this particular spending tracker is not to know every single thing you spend money on, but to understand the regular (fixed) expenses.

We chose not to track categories such as meals or entertainment on this tracker because those are variable expenses. They change from month to month, so we leave those out.

How to Conquer Monthly Expenses

Now, let’s look at the big issue for many of us, which is when there’s too much month at the end of the money. Plenty of people are stressed out, and rightfully so, because they just can’t get ahead on their bills enough to save for the future.

Here are some suggestions for conquering your monthly expenses. It’s better to take action now, before you find yourself in debt and unable to move forward.

Know Your Monthly Expenses

Listing all of your fixed, predictable expenses can be a really clarifying exercise. As discussed above, even if you don’t do detailed budgets, checking in on your regular monthly expenses is critical.

Fixed Expenses

It’s easier than you think. Just go to your checking and/or credit card account statements and locate your fixed monthly expenses. To give you an idea of what to look for, here are my family’s regular, fixed expenses:

  • $1,017 — Mortgage
  • $182 — Cell Phone Service (I’m now with Republic Wireless and pay much less. You can also check out our FreedomPop review for a totally free cell service option.)
  • $79 — Internet Service
  • $50 — 529 College Savings Plan Contributions
  • $43 — Term Life Insurance
  • $43 — Gym and Health Service

Other common fixed expenses you might include here are auto loan payments and health insurance premiums. Those aren’t included for us because we own our cars outright and pay our health insurance from the business account.

You’ll notice that each of these expenses is associated with a contract or auto-pay option, and they’re usually fixed (within a dollar or two) each month.

When going through your monthly expenses, this is a good time to stop and ask yourself if they all make sense. Are you using each of these services? Do you need to add anything? Could you eliminate anything? Or, is there a way to reduce your monthly payments?

For example, if you’re struggling to pay all of your bills, you’ll want to look at canceling anything you don’t need, like the gym membership. Or you might temporarily stop contributing new funds to 529 accounts until you get back on firmer footing.

Variable Expenses

Next, examine the dreaded regular, yet variable, monthly expenses. You don’t have much choice about paying these every month, but the totals will vary depending on usage. If you look at these regularly, you should be able to come up with an average per-month cost for things like utilities. Often, the utility companies will even provide some stats to help you plan, or offer a stable monthly payment plan that balances out how much you’ll pay each month.

These are our estimated variable monthly expenses:

  • $250 — Electric
  • $55 — Water/Trash
  • $40 — Gas/Utility

The purpose of this section is to get to a fairly exact number of what expenses you’re obligated to pay each month, based on the agreements in place. This is a good starting point for evaluating the rest of your spending.

All of your other expenses are going to be variable, and often you have a lot of control over how much you spend in those categories.

These are a few of the possible variable spending categories you might need to consider:

  • Entertainment
  • Groceries
  • Dining out
  • Gifts
  • Personal Care
  • Travel

Consider Moving to Annual Payments

One strategy that takes some of the stress out of making monthly payments: consider moving to annual or semi-annual payment plans. We’ve done this with our tithing, auto insurance, property taxes, homeowners’ insurance, HOA dues, and retirement savings contributions (quarterly).

Of course, along with the convenience of only needing to pay these expenses once a year comes the responsibility of making sure you have the funds on hand for them. We can mitigate that risk by setting up multiple automatic savings plans in our high-yield savings accounts.

Related: Capital One 360 Savings Review

Be Aware of Big, Out-of-Control Categories

Beyond those fixed and variable regular monthly expenses, you’ve got these highly variable expenses: food, travel, fuel, dining out, gifts, clothing, personal care, entertainment, pets, household, etc.

Individually, many of these expenses may not amount to much in a month. But food is a big one for us (and for many families). Think about each of these categories and identify any weak spots you may have, where you tend to overspend.

In these problem areas, it’d be good to budget more carefully. Start by looking at your recent average monthly spending in an area like groceries or eating out, and then set a goal for the coming month.

One way to keep on target in this category is to withdraw cash in that amount and allocate it only for that category. Once you’ve gone through the cash, challenge yourself not to spend any more until next month. You can also employ this method with certain online bank accounts that let you set up “buckets” for individual spending categories.

Many of us have multiple problem categories in our spending. In that case, it’s probably best to start doing a detailed budget every month. You can find tons of resources and sample budgets online. One resource is You Need A Budget (YNAB).

Read More: You Need a Budget 3: A Principles-Based, Powerful Budgeting Tool

Two Budgeting and Tracking Tools To Try

Financial software has grown a ton in the past several years, so you’ve got plenty of options to choose from. These provide simple ways to organize your finances in a digital format. We’ll take a closer look here at two of them: Personal Capital and PocketSmith.

Personal Capital

Personal Capital offers a powerful suite of financial management tools. We all want to be more in charge of our money, and Personal Capital helps you do just that.

With Personal Capital’s free services, you can aggregate all of your financial accounts in one place. This includes checking, savings, investments, mortgages, credit cards, and more.

A lot of people use Personal Capital for its budgeting assistance. You can set up your monthly target spending in every category we discussed above, and then use the software to easily monitor how well you stick to those targets. Many of us just aren’t aware of how much we spend in certain areas, and using software like this can help you get on track.

Personal Capital is also popular for its net worth tracking capability. In the personal finance world, it’s not just about monthly income, but about watching your debts decrease and your wealth increase. Have fun watching your net worth grow as you make consistently smart financial decisions.

There’s a great mobile app with Personal Capital so you can check on your accounts and track various metrics from wherever you are.

You might also use Personal Capital’s Retirement Planner to calculate your projected monthly income in retirement. As you increase your savings for retirement, you’ll see those figures adjust automatically. This can be really motivating, especially if you feel like you’re cutting out a lot of fun right now. You’ll see how the financial sacrifices you make today can positively impact your future.

Personal Capital offers a ton of free services to help you get a clear picture of your overall finances. At a glance, here are some of the key benefits:

  • Budgeting
  • Net Worth Tracking
  • Account Balances
  • Income Reports
  • Spending Reports
  • Asset Allocation
  • Investment Returns
  • Projected Investment Fees

You can learn more about Personal Capital here.

PocketSmith

Another great option for helping you track your expenses is PocketSmith. They are a personal finance software that provides a one-stop shop to monitor your complete financial situation.

PocketSmith enables you to categorize all of your spending, locate and organize your transactions, and schedule your bills and budgets in their calendar.

Tracking your monthly spending is easy with PocketSmith; they offer flexible budgeting plans. You might choose to plan your budget on a daily, weekly, or monthly basis—whichever fits your needs the best. Most of us can do well on a monthly budget, but if you like to break your finances down even more, go for it.

Here are a few of the key benefits of PocketSmith:

  • Automatic live bank feeds
  • Multi-currency (can track account information from different countries)
  • Organization of transactions
  • Manage combined incomes easily
  • Connect your Xero account
  • Import data from Mint.com
  • Cashflow statements are updated monthly
  • Cash projections
  • Schedule bill payments
  • Net worth tracking
  • Secure two-factor authentication
  • What-if scenarios show you how spending/saving decisions can impact you
  • No contracts
  • Basic plan is free

You Can Conquer Monthly Expenses For Good

You’ll always have some monthly expenses. Even people with paid-off homes and zero debt have to pay some bills: taxes, utilities, food, lifestyle items, and more.

This means that while tracking monthly expenses may be a challenge, it’s one that you’ll face all your life. You may as well get good at it!

Work at becoming more conscientious in your monthly spending and periodically re-evaluating your financial situation.

What approach do you take in staying on top of your monthly expenses? Are you a detailed budgeter? Are you oblivious to your spending habits? Let us know how you tackle your spending habits.

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About Philip Taylor, CPA

Philip Taylor, aka "PT", is a CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of the personal finance industry conference and trade show, FinCon.

He created Part-Time Money® back in 2007 to share his advice on money, hold himself accountable (while paying off over $75k in debt), and to meet others passionate about moving toward financial independence.

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  1. Thanks for all the great information. I m learning finally at a late age to not run up credit irresponsibly. Living frugally is a real challenge and blessing.