Once you have developed your budget and all of your essential expenses are covered, you will still want to track your expenses. Tracking your expenses will keep you within your budget. This can be done in a few different ways.

Scenario 1: Envelopes and Cash

Create paper envelopes for every category of budget. Simply write Mortgage/Rent on an envelope and when you get paid, put the amount you need to cover the rent into the envelope. You would repeat this for every category. Put a receipt in the envelope for every purchase under that category. When the money is spent out of that category for the month/week, it is gone until more comes in. You do not overspend. You could take money from another category but that will impact you later and disrupt the discipline you are trying to build.

Scenario 2: Use the SocietalGlitch Personal Finance Workbook

Leveraging the SocietalGlitch Personal Finance Workbook, you can track your expenses every month. The workbook will automatically keep track by category. At the end of the month, you can take a screenshot of the totals or copy and paste them into a new sheet.

Scenario 3: Use Software

You can use a web-based paid solution such as YNAB or an offline solution such as HomeBank. My family has been using YNAB for almost ten years and it has been a game changer. However, there is a cost associated and you may not be in the right place to incur another cost just yet. Start small with our workbook and then up your game with YNAB later.

Understanding Your Habits

Understanding how you are spending your money can give you great insight into where you may be spending too much are too little. Money is an emotional topic for many people. Some of us have learned that we can make ourselves feel better when we buy something like food, alcohol, new clothes, or other pleasures.

As you track your expenses and if you find yourself spending too much in non-essential areas, you will need to be honest with yourself about why you are spending so much in a particular category. Perhaps you spend money on take-out every weekend to treat yourself so you do not have to cook. There may be nothing wrong with this. However, could you spend less and get the same effect? Or could you cook more food on another day in the week in preparation for the weekend?

Perhaps you spend more money when you are out with certain friends or during a stressful time of the month. We are not advocating for cold-turkey restrictions (yet) but rather simply taking small steps toward understanding your spending habits and how they impact your bottom line.