How to Track Your Monthly Expenses and Know Where Your Money Goes

Why is it important to keep track of expenses?

The purpose of expense tracking is to identify potential opportunities for changing the way you spend and the way you save.

Ultimately, the most important benefit of tracking your expenses is that it can help you build better financial habits—and make it easier to save and plan for the future.

Say you’re looking to make a significant purchase, such as a home. You’d like to make the 20% down payment out of pocket, but you currently aren’t putting any money into your savings account.

Tracking your expenses can help you find ways to scale back. Seeing you much you might spend on dining out, for example, can help motivate you to start putting those funds aside instead.

Why track expenses monthly?

Tracking your expenses monthly is recommended for several reasons.

First, the vast majority of pay periods within the U.S. occur within a calendar month. In data shared by the U.S. Bureau of Labor Statistics, the most common pay periods are weekly, biweekly and semimonthly. Noting when you can expect your paycheck can help with planning.

Second, most bills, such as mortgage payments, car payments and utilities, are paid monthly. Tracking expenses in line with when you pay your bills makes it easier to match your expenses to your actual payments.

Next, most credit card statements are sent out monthly—whether as an email or a paper statement. Take a moment to pause and review these statements. It’s a great way to understand where your money is going, categorize your expenses and take action to establish a budget.

While tracking your expenses monthly isn’t the only option, it does provide a potential starting point for making changes to your spending.

If you find you have more time to dedicate to tracking your expenses, try increasing the frequency to biweekly. Alternatively, if you find that monthly is too often for you now, try every three months and return to monthly tracking when possible.

What are some common money tracking methods?

There are several ways you can track your spending habits, ranging from manual methods, such as creating a spreadsheet, journaling or reviewing credit card statements, to digital solutions such as budgeting apps and expense-tracking software.

Below we’ll explore a few of these methods and the pros and cons associated with each.

Journal or use pen and paper for a simple and straightforward approach.

One way of keeping track of your expenses is to keep a record of your spending habits in a journal or notebook. Monitoring your funds by writing down every transaction can be useful because it requires focused attention. However, the process of writing can be quite time-intensive and difficult to keep up with for long periods of time.

Daily distractions can also make it hard to keep up with every purchase you make, meaning this method can also be prone to errors.

When determining whether a pen-and-paper approach could work for you, consider your lifestyle and if you can manage the level of effort it demands.

Build a spreadsheet to customize tracking.

Spreadsheets are another common method that come with their own pros and cons.

It can be a versatile tool that helps you enter expenses more quickly than pen and paper. Using formulas to calculate, add or subtract expenses from your income can automate some of the more time-intensive parts.

Just as pen and paper have limitations, the same is true with Spreadsheets. They still require manual updates and may not be readily accessible when you’re on the road. In this case, consider holding on to receipts to later input into your spreadsheet if using this method.

Review credit and debit card statements.

As part of their cardholder services, banks and lenders provide monthly statements that contain a record of your transactions. This can be a great source for tracking expenses, since it automatically tracks your transactions and shows historical purchase data.

Another benefit is that, when connected to a banking service with budgeting tools, the information is already integrated into the tool, making it easier for you to review.

The downside of only using statements is that they may not reflect pending transactions or may be limited in the types of categories offered. This is an instance when a real-time tracking solution is helpful.

Leverage budgeting apps and banking tools to automate money monitoring.

Budgeting apps provide real-time tracking, so you can log into your account at any time and view your spending.

They can also automate the process of categorizing your purchases.

Because you can download apps directly onto your smartphone, that portable format gives you some of the same benefits as pen-and-paper but makes tracking less of a hassle.

At Associated Bank, for example, we offer Money Monitor tools that provide a clear summary of your spending and savings so that you can have the insights needed to make the best decisions for your financial future.

Associated Bank’s Money Monitor is like a personal financial assistant that:

• Alerts you to actionable insights with smart notifications and updates on subscription or bill changes.
• Sets budgets so you can oversee your plans and progress.
• Tracks spending so you don’t have to worry where your money goes and can instead easily visualize where and how much you spend.

Keep in mind, however, that some apps come with fees or may not have all the features you want from a tracking tool. For this reason, you should always research these apps before devoting too much time to them. Make sure they’re the right fit for your unique circumstances.

Know where your spending goes with regular monitoring

Regularly monitoring and tracking your monthly expenses is crucial to staying on track and reaching your financial goals. Consider setting aside time to do a financial check-in. Look for trends in your spending habits so you can adjust your budget accordingly.

At Associated Bank, we offer several financial tools and resources like Money Monitor, pay and transfer services with Zelle® and more to help customers make informed financial decisions in real time and with the peace of mind of knowing their digital experience is safe and secure.

If you have questions about which expense tracking method will work best for you, how to achieve your financial goals, or more information about the options available at Associated Bank, take a moment to discuss what is possible with one of our financial advisors at 800-236-8866 or stop in at any of our Associated Bank locations. You can also schedule an appointment online.

Tracking and regularly monitoring your spending habits doesn’t have to be difficult. Getting started is what matters most, and then taking steps to adapt your methods to find the best system for your lifestyle.

We’re here to help you through every step of your financial journey and as you work toward your savings goals.