Finance Fridays: Keeping Track

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Before we got debt free, we had no idea where our money was going each month. We ate out a lot, went shopping a lot, went on lots of trips. So after we got debt free, when I knew we were going from two incomes to one, it was clear that we had to start tracking our spending and stick to a budget, or we were going to end up right where we started, which was not an option.

There are all kinds of ways to track your spending. Some people write everything they spend down in a notebook, some use Quicken or other online programs to keep track. Our way is kind of a hybrid of those two things.

We keep our budget in an Excel spreadsheet. We spend money from two places. As many purchases as we can go on our credit card that gets airline miles. (We've gone on vacation several times with those miles too, and it's all for purchases we would have made anyway. Always make your money work for you!) We pay that card off in full every month (of course). Places or bills that won't take a credit card, like our mortgage, are paid directly from our checking account. So at the end of each week, I copy the purchases from our online credit card statement, as well as our checking account, and go through each one and input it into my Excel spreadsheet. The only cash we really spend is from our blow money category, and I don't track cash purchases from receipts, I just deduct the total amount.

Some people might think this is a clunky way to go about it, but it's what works for us - I am going through every purchase, which helps me to really see where our money is going.

We've been doing this for two years. I can see how it wouldn't for some people. But however you do it, if you're interested in either becoming or remaining debt free, tracking your spending is one of the most important things you can do.