Tips for Keeping Track of Your Monthly Expenses
One of the keys to getting out of debt and staying out of debt is knowing what your monthly expenses are. Some of these are easy to track. You get your electricity bill, phone bill, water bill, etc. in the mail. You can file these away for easy reference. But, what about those expenses that aren’t billed in improvement?
Basically, you have three methods of tracking your monthly expenses. You can use a computer program like Quicken, you can keep paper records, or you can use a combination of the two methods. I personally use the third method, so that’s the one I’ll cover.
The only way to really know what your monthly expenses are is to explain every penny that you use. It may seem like overkill to you right now, but you’d be surprised how much those little cash expenditures add up to over time.
Ask for a Receipt
Always ask for a receipt for every buy. If the gas pump doesn’t spit out a receipt, then I record exactly what I spent. I already record the number of gallons and price per gallon, although I will let in that isn’t necessary to get out of debt, I do find it interesting to see how gas prices fluctuate over time! already if you’re only buying a quick $2 item and paying cash for it at the corner store, ask for a receipt. That way you can literally explain every penny you’ve spent at the end of the month.
Organize Your Receipts
You’ll want 12 file folders and 12 business size (#10) envelopes. I label each file and envelope with the month and year. My statements get filed in the file folder and my receipts are stored by date in the envelope which is also kept in the file folder for the month.
Record Your Purchases in Quicken
No, you don’t have to use Quicken, but it is the program I use for several reasons. Quicken allows me to download my checking, savings and investment account information and automatically updates Quicken for me. It also transfers all of my tax information into TurboTax so that filing my taxes each year is a breeze.
But, I don’t stop with the automatically downloaded information. The really nice thing about Quicken and budgets is that you can set up different spending categories. So, when my Walmart buy is recorded in Quicken, for example, I can then go in and revise the “divided”. Using my receipt, I go into how much of that shopping trip was spent on groceries, household expenses, business supplies, clothing, etc.
If I’m wondering where I am on my food budget this month, a associate of clicks and Quicken shows me a report of all of my grocery purchases along with the total for in any case date range I specify.
Wondering if it’s time to revisit your budget and make some changes? Run a report that shows your spending by category. You’ll quickly see whether or not you are staying within budget for each category.
You can already go into your budget into Quicken, and it will alert you if your spending has gone over in any category.
Saving every receipt may seem excessive, but how many times have you needed to return something only to discover you no longer have the receipt? This simple file folder and envelop system makes it easy to find any receipt you need. If you don’t remember the date of buy, you can look in Quicken either by category or vendor, find the transaction, and then go to the proper file folder for your receipt.
Being this detailed may not fit with your personality, and may not be necessary for your circumstances. But, I find the information attained by tracking my monthly expenses this way highly useful! If I want to set aside some money for a specific purpose, I can see at a to peek briefly where I might be able to trim my budget back to come up with the amount I want to save. Quicken will also show you at a to peek briefly your account balances, your noticeable loans, and your assets and your total net worth – very useful information if you are trying to get out of debt and stay out of debt.