How to Start Keeping Tabs on Your Money

June 15, 2015

by Michelle Perry Higgins


It may sound trite, but the hardest thing about starting a spending budget is…starting! To help get you motivated, consider that a spending budget shows you are financially conscious, like being politically or environmentally conscious. And being conscious is cool and sexy!

Once you have started and gotten a system down, the actual maintenance of the budget becomes much easier. But where to start?

1. Decide what tracking method you want to use for your expenses. These can be an online program like Mint, an Excel spreadsheet or an app. You may also want to carry a small notebook to make sure you write down and capture cash expenses as soon as you spend the money.

2. Track all expenses for at least one month. Be as detailed as you can and try to make sure you include everything.

3. Create categories that make sense to you given your personal situation. Don’t forget to include expenses that are paid less frequently than monthly, such as property taxes if you own a home.

4. Create a spending budget for each category. The category spending should be based on the data you have collected, while at the same time it should be forward looking. It is something that you want to be able to adhere to in the future.

Maintaining the spending budget can be challenging. We all get the feeling that we are being too constrained over time and occasionally we rebel and fall off the bandwagon. This is to be expected and should be taken in stride. The important thing is to get back on track as soon as possible. One tactic that can be used to ameliorate this problem is to have a category labeled “Fun” that you can use for whatever you want without feeling guilty. However, you need to resist the temptation to make it too big!