How To Stick To A Budget: 9 Ways To Keep Track Of Expenses
It’s easier to learn how to stick to a budget if you know how to keep track of your expenses. Here are nine ways to do just that.
In this article:
- Why You Need a Personal Expense Tracker
- What’s the Best Way to Track Expenses?
- Learn How to Stick to a Budget with These Expense Tracker Tips
- Refrain From Using Cash
- Record Your Expenses and Budget on a Ledger
- Keep Receipts from Each Transaction
- Use a Budgeting System or Application
- Use Envelopes to Store Your Budget for Each Expense
- Wisely Allocate the Money You Didn’t Use
- Spend Within Your Means
- Hold Yourself Accountable
- Consider Getting Professional Help
How to Stick to a Budget and Save Money | Budget Hacks
Why You Need a Personal Expense Tracker
Consistently keeping a personal expense tracker is one of the most important factors that helps you learn how to make a budget and stick to it.
The danger of overspending lies in not knowing how much you’re spending after your salary comes in. You may think you’re spending a little on each purchase, but these can snowball into an unmanageable amount.
You won’t always realize how much you’re spending daily until you track the data. This includes your necessities, like:
- Items you treat yourself with
Creating an expense tracker to record your spending habits helps you know exactly how much money you’re shelling out. Often, this is different than the amount you’re thinking of.
More importantly, maintaining your own expense tracker eventually helps you learn how to stick to a budget.
What’s the Best Way to Track Expenses?
If it’s your first time tracking your expenses, you can begin by recording every transaction you make within the span of two weeks to one month.
It’s important to take into account regular expenses. Remember, these are the items that are consistently in your budget.
When you create your budget, you can outline the ideal amount you’d like to spend on each expense. Then, keep monitoring your spending to see how the actual amount aligns with your ideal one.
From there, you can adjust how much money you put into certain buckets of your expenses so you’ll always have enough for the important ones.
Learn How to Stick to a Budget with These Expense Tracker Tips
1. Refrain From Using Cash
One of the ways to accurately keep track of your expenses is to use cash minimally. This is especially helpful for people who have a harder time controlling their spending with cash on hand.
When you pay using your debit and credit card or e-wallet, you automatically receive an electronic copy of your transaction record. This makes it easier to keep track of your spending.
Refraining from buying with cash can lessen the time you spend on taking note of every cash transaction you make. Instead, sit down once a week to review all your electronic receipts and add up the expenses in your ledger.
A warning, though, you may want to avoid this method if you’re prone to spend more when you go cashless. The goal is to learn how to stick to a budget, so go with practices that help you avoid overspending.
2. Record Your Expenses and Budget on a Ledger
If you want to deep-dive into extreme budget hacks, start taking note of every transaction you make. You can use an app, your phone’s note-taking feature, or a pen and notebook.
The great thing about developing this habit is it forces you to rethink where you’re spending your money. The disadvantage is you can easily slack off or even forget doing it, and you may not remember every spend you made.
If you already have a budget, taking note of your transactions helps you track how much cash you still have left for each expense.
A good way to track your expenses is through a ledger. You can create your ledger using digital sheets or with a notebook and pen.
Divide your ledger into three columns:
- Type of Expense — Examples of this are rent, utilities, groceries, clothing, and transportation.
- Budget for Each Expense — Here, you write the actual amount you want to spend on each item.
- The Actual Amount You Spent for Each Expense — Fill this out after the duration of your budget (e.g. two weeks before the next payday).
If you haven’t created a budget before and you’re in the process of tracking your personal expenses, you can include basic and regular expenses first. Then, add to the list as you become more accustomed to budgeting and as needed.
Remember, this serves as your expense ledger, and its sole purpose is to record your expenses. This is different from the General Ledger where all transactions are recorded.
This method is also helpful for married couples who are just starting to budget for their household. Take the time to sit down each day to review all the expenses you made and change spending habits as needed.
3. Keep Receipts from Each Transaction
The different payment methods you make can turn expense tracking into a tough and tedious process. It’s also easy to forget and neglect recording everything you spend, especially the ones that don’t come with receipts.
As much as possible, keep the receipts you receive for each transaction you make. Keeping receipts helps you audit your expenses better.
If you spend beyond your budget, you’ll be able to go back to your previous transactions and see what you need to cut down.
This is helpful not only for your budget but also for your tax filing. If you have a personal bookkeeper and you’re required to present receipts when you file taxes, you won’t regret making a habit out of this.
4. Use a Budgeting System or Application
Aside from using the traditional pen and paper, you can also make use of systems or applications to learn how to stick to a budget. They can make your budgeting more efficient and less time-consuming.
The budget apps worth considering are those that:
- Guarantee maximum data security
- Store and backup data on a Cloud storage
- Work across different platforms
- Allow collaborative data entry (this is ideal for married couples)
- Can integrate with your bank
- Are user-friendly
It’s okay to try different software until you find the best budgeting app for you. There are lots of choices out there, but here are some of the best ones in the market you may want to consider:
- Acorns — Helps you save your spare change by investing them
- Goodbudget — Ideal for couples who want to sync their budgets
- Mint — A user-friendly budgeting app that sends alerts for payments due and can connect with your bank and lenders
- Moneydance — Keeps track of your investments; ideal for Mac users
- Mvelopes — Ideal for cash budgeting
- Personal Capital — Great for investors
- PocketGuard — Helps you manage your spending so you won’t go beyond your budget
- Quicken — Provides an overview of your different accounts and keeps track of your spending
- Wally budget app — Best for your basic budgeting needs
- You Need A Budget app (YNAB) — Allows you to create a budget based on the income you make
5. Use Envelopes to Store Your Budget for Each Expense
If you use cash or don’t want the hassle of detailing each transaction, the envelope system may be effective for you. With this method, you allocate your actual money.
- Here, you label envelopes with each expense you have, along with the spending amount you allocated for each. On each payday, put cash in each envelope accordingly.
- Leave one envelope for “Miscellaneous Expenses” and allocate a certain amount for it, as well. This is your buffer spending cash, which you can use for unplanned expenses.
At the end of your budget’s duration, check how much money you have left in each envelope. If you’ve used your miscellaneous budget, note how much you took out and where you spent it on.
This way, you can see if your budget is enough or not for each expense bucket. Keep on adjusting the amount you spend as needed so you can eventually learn how to stick to a budget.
6. Wisely Allocate the Money You Didn’t Use
Sometimes, you may set aside more than the amount you need. If this happens, then it’s a win!
There are several ways to allocate the money you weren’t able to use:
- Save the remaining amount to help pay for the next bill or expense due.
- Transfer the unused amount to your savings account.
- Add the unused amount to your emergency fund.
- Use the remaining balance for goals you’re saving up for like investments, travel, events, and items you want to buy.
7. Spend Within Your Means
This is simple advice, but refusing to limit spending is one of the main reasons why people have a hard time sticking to their budget.
If you know how much you earn, or at least have an idea what your average income is, fit your budget within that amount. Important and regular expenses must be the top priority in your budget, so make sure they’re provided for.
You may need to cut back on some luxuries, but that’s better than having to worry about paying for rent.
8. Hold Yourself Accountable
The last but equally important item in this list is to seek accountability. If you find that you’re having a hard time learning how to stick to a budget, ask a trusted person to help you out.
You can have them keep part of your money for you, or ask them to call you out when you’re spending too much.
Make sure to listen to them when they do try to help you out. Holding yourself accountable can help improve your discipline in financial matters.
Learning how to stick to a budget doesn’t always come easy. With the right discipline and clear goals, you can make your money work for you.
9. Consider Getting Professional Help
If you’re really having trouble or simply don’t have the time to track and manage your expenses, maybe it’s time for you to consider getting a financial advisor or hiring a personal bookkeeper.
A financial advisor can help you understand more about your current financial situation and create a spending plan based on your income and expenses. Additionally, they can also help you make an action plan so you can stick to your budget.
On the other hand, a personal bookkeeper can also actively manage your finances by balancing your checkbook and paying your bills. Additionally, your bookkeeper is also in charge of tracking your expenses.
Follow these expense tracking and budgeting tips, but don’t hesitate to explore other methods that might work better for you. Remember to allocate money not only for your expenses but also for your own savings.
Do you know other budget hacks to save money? Share them with us in the comments section below!