Ways to Track Your Budget


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5 Ways to Track Your Budget

It’s getting close to the end of the month. Last night Johnny was looking at our budget and said, “We have $130 left in our Food category?!” And then I chimed in, “Yeeah… about that. I still haven’t entered in our grocery order from Friday. That will bring it down to $8.” “Oh.” Aside from that, the rest of our budget for January is up to date. Somehow! But as the end of the month draws near, I always find myself wanting to be sloppy with our budget tracking.

What is it about tracking expenses (and thus, actually keeping a budget) that’s so hard? Why do we all continually struggle with it or, better yet, avoid it all together? After tackling and retackling an itemized budget for five years now, here are some reasons our monthly budget tracking has met an untimely demise:

  • We forget for a few days and then throw our hands in the air like we just don’t care and give up.
  • One of us remembers to regularly add their own expenses and the other (*cough* Johnny) forgets.
  • Our budget itself has kinks that need to be worked through (over-categorization, categories with too little money allotted to them, etc.).
  • We go so long without tracking expenses that by the time we add them, we’ve overspent some of our categories and we just throw in the towel for that month.

None of those problems require rocket science to fix. Some of it is laziness, some forgetfulness, and all centered around finding better expense tracking habits. If you’re still on the hunt for the right tracking method, here are your main options:

Envelope System

Johnny and I used the envelope system our very first month of budgeting. You compile your budget, have an envelope for each category, and put the cash allotted to each category into its corresponding envelope. You spend cash through the month, and when your envelope(s) run out, you stop spending for that category. Easy peasy.

Pros: This method is simple and effective. If you’re new to budgeting, it doesn’t get more real than the envelope system — which is often what new budgeters need. Once the money’s gone, you can’t spend anymore. Cash is also a more tangible representation of money (unlike debit/credit cards) which psychologically makes it more difficult to spend.

Cons: If you prefer using a credit or debit card for most of your spending, a cash-only system of budgeting can be kind of cumbersome. After the first month, Johnny and I found ourselves spending money on our credit cards and then trying to retroactively take the cash out of the envelope, which kind of defeated the purpose.

Excel Spreadsheet

If you like using Excel (seek help) or if you don’t have a smartphone, an Excel spreadsheet might be right up your alley. Johnny and I don’t use Excel for our main budget, but we do use it to track our net worth (read all about it!). You can create your own Excel budget or find a pre-made template online and customize it to your liking.

Pros: With an Excel spreadsheet, you can easily see a complete overview of your budget, and it’s on a screen that’s bigger than your hand! You can look back on past months to see what’s working and what’s not, and it’s easy to customize. You can also use whatever form of payment (cash, card, etc.) you want since you’re adding your expenses manually, anyway.

Cons: We like to enter our expenses as they happen, and with Excel, you have to wait until you’re actually at your computer. Sure, there are mobile spreadsheet apps, but pinching 100 different cells ain’t my cup of tea.

Handwritten

If handwritten notes and lists are where you’re most effective, having a hand-recorded budget might be a good option for you. You can print one out and put it on your fridge, keep it in a notebook in your purse, etc.

Pros: Active budgeting doesn’t get more active than a handwritten budget. Each and every expense will be burned into your consciousness because you had to write it down afterward.

Cons: Actually writing in an expense every time it happens might get a bit laborious. And if you’re sharing a budget with your spouse or S.O., it might be difficult to keep track of both of your expenses. Also, it’s 2015 and the robots don’t take kindly to those who don’t assimilate to new technology.

Mint.com

Speaking of robots, it seriously doesn’t get easier than Mint. Just connect your debit, credit, and other accounts, spend your money, and let Mint do all the tracking. Sounds dreamy, but we’re actually not super enamored by the process which you can read about here.

Pros: With their fairly accurate auto-categorization and ability to remember your category preferences, you barely have to lift a finger to get expenses where they need to go. As far as efficiency goes, Mint wins the passive-budgeting method.

Cons: As described in the article above, Mint actually removes you (well, us) from the budgeting process. It does its job so well that it no longer hurts to spend money — and that’s a bad thing. It’s also glitch-prone and a little awkward with cash expenses.

Smartphone App

As you can see from our Best Budgeting Apps, there’s no shortage of options here. For that very reason, this is the option Johnny and I choose to use.

Pros: Chances are good that you always have your smartphone with you. And if you use a budgeting app, you always have your budget with you, too. You can enter in your expenses as they happen and watch your budget update before your very eyes. It’s also easy to quickly check a category to see how much money you have left.

Cons: With all the budgeting apps out there, it can be frustrating finding the right fit for you. Even the app we use has quite a few flaws, but it’s the best we’ve found for our needs so far.

How do you track your budget? Have you found the perfect method for you, or are you still on the hunt? And what speed bumps have you encountered with tracking during the month?

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47 Comments

  • Reply Jayson @ Monster Piggy Bank January 26, 2015 at 7:07 am

    I use Spreadsheet of Gmail to track my budget and expenses so that wherever I am, I can access to it and I can share it with my wife.

  • Reply TT January 26, 2015 at 7:19 am

    Per your guys’ recommendation we tried doing it all via the Home Budget app last year. Even though the Mrs. was on board, I soon realized two problems: I was too OCD to have anything off by even .01, we just had too many types of transactions going on to keep up manually each month. Now we’ve split it up. We use Home Budget for our everyday spending (groceries, gas, occasional baby item), but we rely on Mint to give an overview as it catches accounts and bills where our automated transactions are occurring (internet, cell phone, paying of our CC balance). So our day to day focus is on Home Budget, but I keep an eye on Mint throughout the month to make sure nothing crazy has snuck in (like our internet bill jumping up because our promotional period is over–ugh, hate that business model).

    • Reply Joanna January 27, 2015 at 1:36 pm

      We’re pretty similar to you guys. We look at Mint from time to time, but HomeBudget is good for the day-to-day. Your OCD self is really not gonna like this, but we actually round up or down on our transactions so there are no cents involved in HomeBudget. So things are NEVER exact for us in that app, but it helps us know if we stayed on budget, give or take a few cents :).

      • Reply TT January 27, 2015 at 1:50 pm

        [shudders]

  • Reply Megan January 26, 2015 at 8:04 am

    My husband and I started using YNAB over a year ago and it has been amazing. We use the program on our desktop to make budget adjustments and to “assign” our money to various categories everytime we get paid. We then use the cell phone app to track every purchase. It can definitely take some getting used to, but there is no better way – for us, that is :) I highly recommend YNAB. It enabled us to maximize our retirement savings, purchase our first home and pay off 70K in student loans in the 2 years since we’ve been married.

    • Reply Joanna January 27, 2015 at 2:14 pm

      Wow, those are some incredible achievements — and in such a short amount of time! YNAB seems like a very helpful tool and a great way to see an overview of everything you’re working toward. Congrats on everything you’ve been able to do!

  • Reply Running with Racheal January 26, 2015 at 8:37 am

    We also started out with the envelope system and then quickly became frustrated, so now we do a hybrid. I love using Excel and my husband hates technology (eek), so it works for us.

    We have envelopes, but instead of putting cash in them, we put our credit card receipts in them and then add up the total on the front of the envelope. Then, about once a week, I “balance” our receipts with our Excel spreadsheet. So far (only this month) it has worked perfectly. However, I am considering moving to a hybrid of envelopes/phone app, because I love using my smart phone too.

    Thanks for all the useful info!

    • Reply Joanna January 27, 2015 at 9:17 pm

      Very cool! What a great solution. That envelope system sounds much more up my alley!

  • Reply Joshua C January 26, 2015 at 9:25 am

    Yep. We are a big proponent of YNAB as well. Makes inputting things easy, and it syncs seamlessly. We reconcile using Mint.

    • Reply Joanna January 27, 2015 at 9:19 pm

      YNAB seems to be a great solution for a lot of our readers! I love that it makes you play such an active role in budgeting, which Johnny and I are big fans of!

  • Reply Caity January 26, 2015 at 10:08 am

    After your blog post a few weeks ago, I downloaded the Spendbook app on our iPad (we still haven’t joined the 21st century with smart phones) and I’ve loved keeping track of our expenses there. Before this, I was printing out a monthly calendar and writing down every single expense on the correct day. That got to be a little much and it was a mess at the end of the month… now I enter each expense into the correct category on Spendbook and it gives me my overall remaining balance for the month. For now, I’m still writing out our monthly budget on paper (there’s something enjoyable about writing things down with paper and pencil..) Also, our grocery budget is the area we go over almost every month! (You’d think I’d just give in and allot more money for food.)

    • Reply Joanna January 27, 2015 at 9:21 pm

      I agree… I insist on keeping a handwritten planner because something about writing things by hand is just irreplaceable. Glad you’ve found an app that works for you guys! That can make all the difference!

  • Reply Shay Hass January 26, 2015 at 10:24 am

    I use quicken. It has an app too for your phone. I auto enter our budget into the quicken check register a month in advance. At the beginning of every month I adjust it for special circumstances like birthdays, Christmas, vacation spending etc.
    As real charges get imported from the bank, I just subtract or adjust from the previous entered budget lines.
    it works great and I can always see what my bottom line is.

    • Reply Joanna January 27, 2015 at 9:30 pm

      That’s great. I’ve never looked into Quicken, but I’ve heard a few people mention it. I’ll have to take a look at it!

  • Reply Sarah January 26, 2015 at 10:39 am

    I’ve yet to find a system that I can stick to. I need to just force myself to do it.

    • Reply Joanna January 27, 2015 at 9:30 pm

      It definitely takes some trial and error, but it’s well worth it once you do!

  • Reply kirsten January 26, 2015 at 10:43 am

    I use an excel sheet through Google drive so both me and my husband can access it from our phones and computers.

    • Reply Joanna January 27, 2015 at 9:31 pm

      Nice! That’s a great way to make it accessible at all times (and always up to date on both your phones!).

  • Reply Rob January 26, 2015 at 10:49 am

    Using a computer word doc file we print off and use a monthly hard copy 1-sheet page, divided between our income categories and our expense categories, both of which in turn are split between the budget figures vs the cumulative-to-date actual figures (got all that?). At month end I then update into an excel spreadsheet the total monthly actuals and establish the budget amounts for the next month (which I then use to update our word doc file, before printing this off the next month). Each evening, throughout the month, I spend a few minutes (max.) recording any expenses that either my wife and/or I have made for that day. I elected to do this last task because my wife – like (*cough*) your Johnny – sometimes forgets! :-) At year end I then use the spreadsheet to tabulate the total year-end figures, which I finally then compare to the previous year’s totals to track expense trends.

    • Reply Joanna January 27, 2015 at 9:34 pm

      Sounds like you’ve got a system down pat! We do something similar with entering our totals in Excel at the end of the month; it’s a nice way to see a big-picture view.

  • Reply Suzanne January 26, 2015 at 10:52 am

    Hey! This was kinda funny mainly because I’m the same. I’m all “watch me work this budget” and “you wait and see, I’ll have it down to the last penny” and like a diet, it all falls down around the cake! Seriously though, I think life just gets in the way…. you think to yourself “I’ll write it down later” or “I’ll log that spending later” and then something happens and before you know it, three days have passed and you’re like “oh no!!”. What I do, seeing as I’m paid weekly, is to put set amounts towards various bills weekly (like mortgage, car etc) so that by the time the monthly payment comes out, the money is there… When I’ve paid for whatever else needs paying, I’ll withdraw what’s left (I don’t use this account for savings, it’s just a salary in, bills out kinda account) and this is my discretionary money to spend then. When its gone, its gone until next week’s pay. I suppose its kind of backwards budgeting? I don’t use any apps or any fancy online tool or anything, just old fashioned pen and paper… I’m defo a pen and paper girl, I like to see it written down..!!

    • Reply Joanna January 27, 2015 at 9:37 pm

      Very cool. What a smart system. It seems like you’ve come up with a failure-proof plan!

  • Reply dojo January 26, 2015 at 2:01 pm

    I use ace money, it’s a small budget program I have installed on my PC since 2011 I think (or something like this). Has multiple currencies and works well. I couldn’t imagine living without tracking my expenses and budgeting, it has helped us a lot with our money and how we spend it.

    • Reply Joanna January 27, 2015 at 9:38 pm

      Agreed. Once you’ve been tracking for a certain amount of time, it’s hard to imagine your life without it!

  • Reply Anne January 26, 2015 at 2:03 pm

    H and I use Mint for transparency and the overall household budget, but I’m old school for my spending and track on the notepad that came on my phone. I set a monthly target for variable spending (groceries, gas, fun, etc) and track all of those purchases with a running monthly total. It could be tough to remember at first, but now I reach for my phone after checking out anywhere and always know where I’m at.

    • Reply Joanna January 27, 2015 at 9:39 pm

      Yep, it’s all about getting into that habit. I use the notepad on my phone for all kinds of stuff, too!

  • Reply Courtney January 26, 2015 at 2:14 pm

    YNAB!!!!! I budget once a week on payday. The software gives me the ability to flex in certain categories when I need to without putting mandatory categories at risk. I don’t know how I managed my finances without it.

    • Reply Joanna January 27, 2015 at 9:40 pm

      Awesome! It sounds like it’s the perfect system for you. And very cool that it’s flexible for certain categories.

  • Reply Christy January 26, 2015 at 3:18 pm

    I LOVE spreadsheets. It’s an illness. I don’t want to get well. 😉

    I like mint, but I have trouble with it because of how time-consuming it is to categorize everything…my categories tend to me more general. I also find it doesn’t account for if you make transfers- for example- let’s say I transfer $500 from savings to pay for a car repair, it still says I spent more than I made when clearly I didn’t. 😉

    LOVING the blog- glad to have found you guys.

    • Reply Joanna January 27, 2015 at 9:46 pm

      Haha, oh dear… you and Johnny both! Watching him create a spreadsheet is like watching a mad scientist in his lab. Glad you found us!

  • Reply Melanie January 26, 2015 at 3:49 pm

    I used to use Mint regularly but I found it often mis categorized things and messed up the numbers, so I just log in occasionally to see Net Worth and such. I use paper & pencil and track my daily expenses, then total them each week, each two weeks, and then month end. I use Dave Ramsey’s budget sheet too. And finally, I keep a running Excel spreadsheet which I update often based on my spending.
    That all sounds insane. Maybe I’ll try YNAB trial and see how I like it.

    This month…I learned how to ski. And I loved it. Come to find out, its an expensive sport!! So, I’m overbudget so far….eek. Too much “FUN” spending!! :)

    • Reply Joanna January 27, 2015 at 9:49 pm

      Yes, that’s one of the reasons why we only use Mint occasionally, too. It got way too annoying to fix all the mistakes. If you’re doing all of that manual tracking already, I bet you’d really like YNAB… I tried out the trial, and it’s a little too comprehensive for me, but it’s still a really great system.

      And I think anything that keeps you sane during the winter is well worth the money!

  • Reply Maddie January 26, 2015 at 4:31 pm

    we’ve been using the HomeBudget app per your recommendation (which I mostly like, but if I have to go back after the month is over, it’s not as intuitive as I’d like and I can’t figure out how to see and overview of the past month) and I usually use mint.com to know what to add in there since I’m not very good at updating the budget daily. I think in February we’re going to do envelope budgeting for food, my budget, my husband’s budget and our everything else category. We’ll use credit card/direct withdrawal for all of our fixed costs since it’s already set up that way anyways. I’m hoping this will help me get my head back in the game and stop spending on my credit card while justifying that I’ve at least put it in the budget!

    • Reply Joanna January 27, 2015 at 9:50 pm

      Yes, HomeBudget has some kinks… we’ve had to make it work for us, rather than it intuitively being perfect from the get-go. The envelope system is super effective. It will definitely get your head back in the game! Good luck!

  • Reply Mike January 26, 2015 at 5:21 pm

    You know I really like the idea of a cash / envelop system but more and more I am living in a cashless world. BUT I still need to budget so I go the Excel route.

    • Reply Joanna January 27, 2015 at 9:53 pm

      It doesn’t matter how you do it, as long as you do it! Glad you’ve found your system!

  • Reply Taylor Lee January 26, 2015 at 8:12 pm

    Mint user, 100%. It’s a love/hate relationship. It categorizes things wrong ALL THE TIME but I get pretty graphs at the end of it so, eh, I’ll take it.

    • Reply Joanna January 27, 2015 at 9:55 pm

      Too true. The amount of time you’re putting into recategorizing is no more than what we put into manually entering our budget, so it’s probably still worth it — especially because of those pretty graphs :).

  • Reply Emily N. January 27, 2015 at 9:21 am

    Another YNAB lover here! My husband and I started using it in August and it’s made a huge difference in our finances. Our previous budgeting strategy was the “keep a vague idea of everything in your head”, which had its definite downsides, especially when one person didn’t keep all of the pending payments in their (his) head. I love how YNAB easily allows you to see transactions before they hit the bank. It’s also a huge load off the brain to know that we’re building in a cushion for those lower income summer months (husband is a teacher, so our income fluctuates).

    • Reply Joanna January 27, 2015 at 9:56 pm

      Awesome! It seems like YNAB has helped so many people! It seriously leaves nothing out, which makes it so much easier to ensure your money is going to the right places. Glad you’ve given mental budgeting the boot!

  • Reply Laura January 28, 2015 at 9:33 am

    I use Mint as my main budgeting tool, but I take the spending amounts and put them into my own Excel sheet (I love Excel…). That makes it more of an active budget. However, I wish the purchases showed up quicker on my cards and then Mint, especially gas. I’ve tried to keep receipts or enter the amount spent on my phone immediately but that only lasts like 1-2 purchases. But being able to track it a couple days later is better than not at all!

    • Reply Joanna January 30, 2015 at 9:26 pm

      Nice! It sounds like you’ve got a good system. The delay in purchases showing up is a pain! Hopefully it’s just a matter of time before that’s figured out, too!

  • Reply Naomi @ Rising Net Worth February 6, 2015 at 10:44 pm

    I’m a second time Minter. Originally I thought I’d be better off doing a more hands-on method but like others have mentioned. Staying on top of bills/finances along with everything else can get rough quickly. I found myself downright loathing looking at my spreadsheet and filing receipts at one point. So I returned to Mint and everything is good with the universe. I like that Mint can pick up the slack [read: keep my finances orderly!] when I’m having a relatively hellish week… and for that I’m forever grateful!

    • Reply Joanna February 8, 2015 at 9:55 pm

      What’s important is that you’ve found a method that works for you, which it sounds like you have!

  • Reply Dan Olson February 10, 2015 at 4:32 pm

    We are big fans of the “envelope budgeting” concept (thanks Dave Ramsey). We used Mvelopes.com for a few years. But we finally got fed up with the flakiness of the app itself. The functionality was there, but the technology was getting unbearable. When you have to refresh the screen multiple times per session and then log out and log back in all the time, it gets to be too much.

    We are now using the budgeting feature in Mint.com and treating it like an envelope system. We have trained ourselves to always look at the Mint budgets to see how muhc money can be spent in any category (that we have budgeted) instead of looking at our bank balances. This is the fourth month that we have used it and so far so good.

    • Reply Johnny February 16, 2015 at 9:07 am

      We gave Mvelopes a shot, too, but we couldn’t even make it out of the setup process, unfortunately. Just too many technical snags.

      We love Mint, but we’ve never been able to make it work for budgeting. But glad it’s working out so well for you guys!

  • Reply John December 29, 2015 at 5:54 am

    I was looking for an app for while, but ended up with setting up a simple google form that captures expense records and saves it in excel file in the drive. Also sent link for form to my wife so transaction are saved in same file. It easy set everything up and analyse afterwards. And the main thing it is fully customizable and free ))

    I have posted step by step instructions with screenshot here:
    http://hitech-us.com/articles/entry/23/How-to-create-your-custom-budget-tracker

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