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:
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.
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.
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.
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.
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?