Tracking expenses

[David1961]

I know there are posters here who track all their expenses very closely. I’m wondering how you do this? The expenses from credit cards or checks are no problem, but what about cash purchases? Do you keep a notebook with you at all times and record every time you get something from a vending machine or get a $5 sub at Subway? Do you have a spreadsheet that you fill in each day? Do you write down credit card purchases when you make the purchase or write them down when the statement comes?
Currently, I count ATM withdrawals as expenses and when I need more cash, I make another withdrawal, but this is not real accurate – I may withdraw the money in September but not spend it until October. It’s close enough, but I want to start tracking closer. Any suggestions will be appreciated.

 

[sailor]

I rarely use cash nowadays (The government must love me!)
I have not taken any US money out of ATM probably for last 3-4 years (I use ATMs abroad).
What's wrong for paying $5 at Subway with credit?
I do track bigger ticket items, but small potatoes I lump in misc category in quicken. My end of year cash discrepancies are not worth tracking to me ( < $50 )

My DW on the other hand takes cash out and forgets to put it in Quicken what she used it for. So far we only had one "huge" cash shortage (to the tune of $800 at the end of the year). She promised to watch it better

We use cash mostly for craigslist purchases.

 

[rbmrtn]

I don't track things down to the penny, but I put almost everything on the CC. Then I download the CC transactions into quicken once a month and assign to categories. I stopped using vending machines ( it's amazing how much you can spend over a year buying a .60 soda/day ). The small amount of cash is usually for miscellaneous items and goes in that category in quicken. I also have not withdrawn via ATM in many years.

 

[Finance Dave]

I rarely use cash unless smaller than $10...and those small items don't make much diff in the budget anyway, unless they are every day such as a latte (which I don't drink). If it is every day, it's pretty easy to budget...$7/day latte x 30 days = $210/month.

I only track the expenses on a detailed level for about 2 months, and only about every 2-3 years. We use that for template for the next 2-3 years. One thing to watch for is seasonality though...so often we'll do it for one month in winter and one month in summer, then average the two.

Be careful of infrequent items like property taxes, Christmas gifts, etc.

We don't use quicken for this...we do it in Excel. Then we set up auto-transfers from our payroll to a joint account. Once we stop tracking and go into "automatic" mode, if we spend more than what we budgeted, we run out of money in our joint account (but that never happens). All the remaining money goes to savings/investments.

We have a few rules:
1) Neither of us spends more than $100 without consulting the other
2) If either of us spends more than $100, we must check the bank account first to see that there are sufficient funds
3) nothing is done with secrecy...if either of us overspends, we tell each other and transfer from an emergency fund...then we don't eat out or drink lattes until the balance is replenished
4) Once a year we sit down and go through ALL our finances in a 4-hour session. This includes budget performance, retirement savings status, investment allocations, are the wills up to date, health care proxies ok, changes needed in automatic transfers, any anticipated "special items" needed in the coming year (this year it was a $4,400 privacy fence we agreed on), and so on.

 

[easysurfer]

I use a computer program (budgeting software, not spreadsheet). Usually I enter my spending as soon as I spend--such as online purchases, or when I return (for example, if I go out and buy groceries or get gas).

 

[KB]

I track my expenses with an old version of MS Money that came with the disc.

When I get cash from the ATM, I add a transfer transaction from my Checking acct to a Cash acct on MS Money. And when I spend cash, I use the receipt to log a withdrawal from the cash account. I make a note on another receipt in my wallet so I don't forget. I usually have some spare paper I can write on if there are no receipts. Once I log into MSMoney, I either toss the receipt or stick it in a little box of receipts if I think I might need it again.

Recently I went on a short trip where I paid for meals and tips in cash. I had a little notepaper that I wrote the dollar amounts down. I only reconcile my MS Money accts once a month, so if I'm off on my cash account, I just do a correction to the actual cash I have on hand. I'm not a 'balancer to the penny' person, I just want the best picture of where I'm spending my money.

I keep a list of credit card purchases in my wallet (which is actually a small planner) and log them to MS Money once every week or two. I also pay my cc off every week or two using that list of charges. Then I compare that to my cc bill when I get it, to make sure I haven't missed any charges.

I've been doing this for probably 10 years, so it's not so complicated now. All my accounts are set up and my normal expenses are recurring, which makes them easy to log.

I try to look at each month and see where the $$ was spent, and I do run an annual report and print it out for comparison to previous years. I do that in January after I log all December transactions. It is interesting to compare year to year and see what expenses have changed.

 

[aaronc879]

I'm single and very frugal. This may not work for most people but I just have a Word document and I type in every purchase I make, no matter how small, on a daily basis. I have 7 categories and only make about 15-20 entries per month. Some people it seems make that many purchases each day

 

[W2R]

I keep track of cash spending in the Open Office version of Excel. I enter cash spending into an app on my iPhone temporarily, until I get home and can put it into Excel. I balance my spending records and reconcile them with my wallet contents about once a week.

And yes, I choose to record every cent, whether it is $5 or $0.50.

 

[rodi]

We're in process of getting a snapshot of the cash expenditures. Anything on credit cards or EFT'd from checking is tracked in Quicken.

So - hubby and I have small notebooks. We either save the receipts and log them when we have enough of them - or if it's something like a vending machine at work (no receipt) I log immediately.

It's been eye opening. Hubby realized he wasn't put in reimbursements for work related parking as much as he should have. He also realized he spends a lot more at work, eating out. I realized that misc. stuff (like riding my bike up to the grocery store for one item) adds up quick.

The kids also loosely track their spending. We have a "conti" book (pronounce goon-di in a thick Sicilian accent.) They earn money doing chores - it gets logged. They want to buy a video game or some other questionable expense I'm not using my money for, it gets deducted. One of them has learned the power of deferred gratification. They other blows his balance on candy and gum at every opportunity. But they can see what they [-]blow[/-] spend it on.

 

[aaronc879]

And yes, I choose to record every cent, whether it is $5 or $0.50.

For the 3 years that i've been tracking all spending i've rounded every purchase up to the next $. Starting next year, i'll record all spending down to the penny.

 

[bo_knows]

I track spending using Mint, because it is mostly automated. We mostly use our credit cards for spending, and I often chalk up Cash Withdrawals as "Misc" because it is so low of a % of our spending.

 

[easysurfer]

For the 3 years that i've been tracking all spending i've rounded every purchase up to the next $. Starting next year, i'll record all spending down to the penny.

I record to the penny (easier for me to just enter the entire amount then have to work my brain and decide do I round up or down or truncate?). However, my tracking software rounds off the entries for me which I actually don't mind.

 

[meekie]

I download statements from the banks/credit cards a few times a month. I count cash as "entertainment" cause it's used almost exclusively for eating and drinking out.

My parents have been cash only people for a long time, and they don't really have a good idea what they spend. I've been encouraging them to setup a budget, so they've started with a piece of paper on the fridge to track their spending for the day. They usually have 1-2 expenses per day (lunch and maybe the grocery store), so it's pretty easy for them to track at the end of a day. Seems like a good solution if you're doing a lot with cash.

 

[W2R]

For the 3 years that i've been tracking all spending i've rounded every purchase up to the next $. Starting next year, i'll record all spending down to the penny.

I just do it to the penny for fun. It probably doesn't make that much difference in the long run. This is my first year tracking cash like this.

 

[jebmke]

mostly credit cards, direct debit and a few checks. Very little cash. Most places don't even require signature for small CC purchases so it is easy now.

 

[scrabbler1]

I rarely use the plastic (debit card or credit card) to buy things, so most months I receive no CC bill. Most of my day-to-day purchases are cash and small. I don't sweat the small stuff.

I have a spreadsheet which is an expanded version of my checkbook register and is linked to an skeleton income tax form. I have columns of expenses in this spreadsheet pertaining to monthly and less frequent bills with a specific payee, sometimes split out into categories (i.e. my co-op monthly maintenance check which includes tax-deductible property taxes and mortgage interest). I make about 2 cash withdrawals per month but do not allocate the cash to any specific category unless one is already present (i.e. I pay a CC bill with cash).

At the end of the year, I write up a summary of my expenses on a piece of paper but also keep one in another spreadsheet. I also have a retirement spreadsheet I use to project expenses for future years. That one was incredibly valuable in the planning stages for ER but I still use today for short-term and longer-term planning in my ongoing ER. These spreadsheets have figures rounded to the nearest dollar.

 

[Ronstar]

I know this is taking the easy way out, but I keep an excel spreadsheet with cc and checking .csv downloads. I use cc for almost everything. I only take cash out of the atm, and I categorize all atm withdrawals as misc. I don't track individual cash expenditures.

 

[Mulligan]

My expenditures are pretty consistent even my wasteful ones. However, I audit my monthly expenses about twice a year, and I count every dollar spent. Right out of the 1950s, I use a columned ledger for categories and write in description of expenditure. I brainstorm at the end of each day and then right it down on each line. I can right these daily expenses faster by hand than it takes to turn on the computer so for me it is easier and quicker than an excel spreadsheet. Just tally up each column at end of month to see where it's going and how much.

 

[tmm99]

I used pear budget excel spreadsheet (i believe you can still download it from their website) for 2 years to track all expenses (including stuff out of vending machines). It was a lot of work to put all that in pear budget but I wanted to do it so I could figure out where I was spending the money and how I could cut the spending without much sacrifice. I no longer do that. All I do now is put together a guideline at beginning of each year for spendings for each category and for saving how much from what source. I review total cc spending and bank withdrawals each year (just the total) and I call it good.

 

[packrat44]

We have set up for auto pay for reoccuring expenses such as utilities; insurance; Medicare premiums; etc. The remaining we place on 1 CC and pay off at months end. A few checks have to be written such as quarterly estimated taxes. I look at expenditures once in awhile, but do not let it get me wrapped around the axle. At this stage in life I do not see tracking every minute expenditure as having much value. It would be a waste of a precious resource - time. I prefer wasting, I mean, spending my time on this forum.

 

[Khufu]

I know there are posters here who track all their expenses very closely. I’m wondering how you do this? The expenses from credit cards or checks are no problem, but what about cash purchases? Do you keep a notebook with you at all times and record every time you get something from a vending machine or get a $5 sub at Subway? Do you have a spreadsheet that you fill in each day? Do you write down credit card purchases when you make the purchase or write them down when the statement comes?
Currently, I count ATM withdrawals as expenses and when I need more cash, I make another withdrawal, but this is not real accurate – I may withdraw the money in September but not spend it until October. It’s close enough, but I want to start tracking closer. Any suggestions will be appreciated.

I recommend that you track cash expenses as well as all others. I have been using Quicken for the past 15 years or so and another program before that. I don't write down expenditures because I use a companion program called PocketQuicken in my PDA that lets me enter them as they occur into the PDA and later upload directly into Quicken. PocketQuicken is no longer available however. Eventually i will have to switch back to carrying a little notebook. But you need to enter your credit card transactions manually so that you can do a reconciliation on the credit card account at the end of the month. Downloading transactions from banks, brokers, and credit card companies means that you no longer have an independent copy against which to reconcile the version from those companies.

Quicken is a much better program, for all its faults, than you are going to set up in a spreadsheet because it will track investments, loans, etc. We have many accounts of all types which I would not be able to keep track of with a spreadsheet. Quicken even has a primitive financial planner, which is not adequate, but can help get you focused on the long haul. That was the first planner that I used, although I have long since switched to professional level software.

It is some work to keep track of all the financial activity of your household, but once you commit to doing it, you will hardly notice. The benefit is that you know what is going on. For instance, we have multiple investment accounts. By keeping them all in Quicken we can focus our attention on our total return across all accounts, which is what is important, not how this or that specific investment performed, which is what you hear most investors talking about. Ask someone who is bragging about his Apple stock what his total return is for the last 1, 3, and 5 year periods and he will give you a blank look.

 

[Gill]

Become a Habit

I've tracked all expenditures to the penny for over 20 years, first in Money and now in Quicken. It really isn't that difficult to just record an expense the day it's made. The only exception I make is that, when I travel I count my cash when I leave and when I return, and simply record the difference as the cash cost of the trip. I find it reassuring to know where my money is going. Every year I make a spending "plan", not really a budget, and then periodically check how I stand against plan. I guess that's maybe the lawyer/CPA in me but I find it comforting and interesting.
Bruce

 

[Animorph]

I track everything in Quicken, including cash. Receipts are nice for tracking cash. Memory is not as good. And sometimes I count what's in the wallet and charge the difference to "eating out". I only track dollars for cash. Pennies for everything else.

 

[pb4uski]

I don't track cash expenses. Life is too short. 97% of our expenses are on credit cards or paid through check. When I withdraw cash from the ATM or if I put a group meal on a credit card and collect cash, I charge it to "Spending Money" but it is only 3% of our total expenses so not a huge deal in our case. Close enough.

 

[Live And Learn]

I use cc or automated debits for almost everything except "pocket money". Both DH and I get a set monthly "allowance". He tracks his to the penny. I don't because I know my habits and I know where my money goes. Its generally wine and entertainment and thats enough info for me. If I have anything leftover at the end of the month from my allowance it goes into "my kitty" that I can use to buy stuff at a future date.

The cc and auto debits get downloaded into a spreadsheet monthly and categorized.

Years ago I tracked every penny until I gained enough knowledge of how I spend my money to be comfortable enough to give it up. Once I retire I will track to the penny again until I become comfortable with my "post retirement spending habits". My guess is it will take 1 - 2 years for me to go back to the single "pocket money" category.