How to Track Expenses – Methods That Work and Some I Hate

How to Track Expenses - Methods That Work and Some I Hate #personalfinance #expenses #tracking #budgeting #financialplanning

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Team – Today we are fortunate enough to have another “Mailbag” post to share with you! Matt reached out a few weeks ago asking for some context about how to track expenses. I thought the question was a great one and because I had more than a few lines to write – I thought this made for a great Mailbag candidate post!

 

(Photo courtesy of Justin Montemarano)

 

I’ll let Matt set up his question about how to track expenses:

 


 

Hi Mike,

 

 
I just read your article from business insider. I related to a lot of aspects of your families story, and at the exact same spot in life. More exciting to me was the relatability of you and your wife’s approach to finances. I’ve been looking for a better way to track our families daily expenses, and I’m wondering what you use to track daily expenses?

 

 
I’m looking forward to following your blog…and hope you have a minute to help me with tracking/organizing daily expenses.

 

 
Appreciate your time,

 

 
Matt

 


 

Matt – thanks so much for reaching out and I’m thrilled that enjoyed the article and were able to take something from it. That’s awesome!

 

Personally, answering the question of – “How to track expenses?” Our process has evolved over the last 10 years or so

 

How to Track Expenses - Methods That Work and Some I Hate #personalfinance #expenses #tracking #budgeting #financialplanning

 

I hope you don’t mind if I give you a little about what we’ve done in the past to set up where we are currently with tracking our daily expenses. You cool with that?? OK – sweet. (My grandfather always told me not to assume, but I’m giving myself a pass here…)

 

The cold honest truth – 10 years ago I didn’t track a damn thing

 

This point in time puts me in my first year of graduate school, and although I did have a tightly-regimented budget for my first 3-month research trip to a Costa Rican rainforest, my personal finances just kind’a happened to me. I had zero intentionality with my spending.

 

The hard lesson I quickly learned by not tracking my expenses (or anything financial, for that matter) was that what gets measured gets results… Or more appropriately, what doesn’t get measured – doesn’t get results.

 

I found myself driving a BMW 128i (on a 3-year lease and paying north of $400/month), living in a 2 bedroom apartment (before my then-fiancee and I moved in), and eating out more often than what I could afford to do (I could afford to eat out 0 times per week, but I ended up eating out significantly more than 0 times each week…). All that spending was done on the meager $20k-ish annual salary I was earning from my school.

 

My savings depleted at a rapid rate and I knew that something had to change

 

I found someone to take over the lease on the car, ended up moving in with my then-fiancee (to a smaller apartment), and started getting my $tuff together as far as spending…

 

In the early days, I started my tracking with Mint

 

I still swear by the benefits of using Mint. The platform automatically syncs with all of your bank accounts, credit cards, mortgage lenders, auto loans, and will regularly pull transactions from all of these accounts at multiple times throughout the day.

 

To me – Mint was the first software program to give you an all-encompassing look at your current financial situation.

 

Past that, I also built our first budget in Mint… Keep in mind that this was multiple years ago, but I loved the opportunity to build a budget, categorize the transactions that came in throughout the month, and actually visualize (in real time) if we exceeded spending or fell short (in a good way) in any category. It was a great concept and I loved just about everything about it.

 

The only issue for me was that the budgeting platform was a little clunky and didn’t give me the most accurate way to categorize some transactions.

 

That being said – still to this day, Mint is my #1 favorite platform to use for tracking daily expenses.

 

I ended up cheating on Mint about 4 years ago…

 

It lasted about a week, I had no feelings for the new software, and I can’t even remember it’s name… Really – it was nothing!! 😉

 

 

Ok – it was Personal Capital (PC), and frankly – I hated the experience

 

 

I know that saying, “I can’t really stand Personal Capital,” is the second most deadly sin as a personal finance blogger (behind the one and only admittance that there is such a thing as ‘good debt’…) – but it’s the truth.

 

The app had a terrible time syncing with my bank, couldn’t pull my obscure state retirement account into its system like Mint could, and then there were, “The Calls”…

 

I got my first call from a PC rep the day after I downloaded the app and loaded (tried to load) my personal accounts. They offered a complimentary consult and overview of my current financial situation. I politely declined and asked them not to call again (both over the phone and via email as a response to that rep’s first attempt to reach me). They politely said, “No worries.” And we were good to go…

 

We were not good to go

 

That first meeting was at least 2 years ago and I still get calls to this day from San Fransisco (PC). Honestly, it’s ridiculous and no matter how many times I ask them not to call – they’re like the cockroaches… They always come back.

 

 

I went back to Mint and stayed there until my next honest admission:

 

After 7 solid years of meticulously budgeting, tracking, and examining – we don’t track daily expenses like we used to

 

7 years is a long time. For every month during the past 7-ish years, we made a budget, tracked our expenses, and had an after action review (AAR). We now have a pretty good idea of where our money comes from and where it goes each month. But that doesn’t mean I can just sit on my hands and expect things to work perfectly… Here is what I do now to make sure nothing slips through the cracks.

 

For our business– I track every expense using QuickBooks

 

This is non-negotiable and will never go away. Although the platform may change, we will always track every expense for our business. I need that information for tax purposes and as a CEO – it is vital that I know exactly where our money comes from, where it goes, and how it flows through our business.

 

So far – QuickBooks has been the best platform I’ve used to track, monitor, and examine our spending – hands down. But the rub with that is… it’s the only platform I’ve paid to use – so take that information as you will.

 

Every morning I check the 4 apps on my phone that contain all our personal and professional financial information

 

Bank accounts, business accounts, debts, and online savings (I hardly ever check our investment accounts). During this morning check, I’m looking for fraud, confirmation of income, and just doing an overall status check to make sure that our finances are in tip-top shape… Call it a daily morning maintenance check for our financial health.

 

If anything is out of sorts – I’ll investigate. If not, I’ll complete the 3-minute check then get up to do my push-ups

 

I do a monthly check of our net worth (and chart our progress)

 

This is the first time I’ve written about monitoring our net worth on the blog, and while I’ll have much more to say about the topic soon (probably in a stand-alone post), I think that tracking our net worth is my new form of budgeting in our personal life.

 

In my humble opinion, there’s no better way to get a comprehensive look at your family’s current financial situation… And this is where a good blogger would go and sell you his “All Encompassing Net Worth Tracker!”

 

But because this is MikedUp Blog and I actually care about what’s best for the people that matter most to me in the blog world (my readers) – I use a simple Numbers template that came with my Mac. It does the job just fine and after the initial setup, tracking our monthly adjustment is a breeze.

 

I did add a visual chart that shows me where our net worth was at any point in history, but other than that – I use the base model.

 


 

Reader’s Input

 

Thanks so much for the question, Matt! It’s because of engaged readers like you that we can all tackle pain points in our financial lives – I really appreciate you reaching out!

 

Speaking of ‘engaged readers’ – I’d love to hear your thoughts in the comments below! What do you do to track expenses? What have you done in the past and how did it go? Let’s keep this discussion going and learn some stuff together!

 

Thanks for reading!

 

If you’re interested in discovering a better version of yourself – whether with fitness, finance, or family – then subscribe below to MikedUp Blog’s FREE newsletter and let’s improve together!

 

I’m glad you’re here. Thanks again and talk soon!

 

– Mike
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4 Comments

  1. We track our budget both on the computer AND by hand.
    My husband has a pretty specific system in a good ol’ fashioned spreadsheet, and TBH I’m still learning how to navigate it. It’s been a learning curve and lesson in patience for me, because I’m used to doing it MY way, but his system really does make sense for our income and expenses.

    On paper, I do much more broad categories of what’s coming in and what’s going out — less detailed, but equally effective for the big picture.

    1. Interesting, SC! I think it sounds like we need to see that post from you at some point in the future. I think the point here is that as long as you have a method that works for you, that you understand, there really are multiple ways to keep an eye on your current financial state.

      Thanks so much for stopping by and for leaving your thoughts!

  2. I have only been using personal Capital and really have nothing bad to say at all about them.

    There are a few accounts that don’t register on their site and I have to manually input them on my excel spreed sheet but otherwise I really save a lot of time having personal Capital aggregate all my assets in one place. Helps me rebalance when I need to when it breaks down all the various asset classes for me.

    1. Thanks for stopping by, my friend. I wrote this post before you and I had our chat about Personal Capital a few months back…

      I will give it another shot at some point here – and then I’ll report back with my honest take for round #2. I appreciate your opinion and I’ll give it another try.

      Hope it’s been a great week!

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