I use an excel spreadsheet to plan out my spending for a year in advance. Each week I replace the planned amounts with the actual numbers. Saturday I came home from errands and dropped the VISA receipts for groceries and gas on the keyboard. Next time I check emails I’ll take 1 minute to enter the numbers and I’m done. Every Friday I check the online VISA account and pay off the charges that have been processed. Having all our spending planned out a year in advance really allows you to assess what you can afford at any point in time. Whenever I mention my method of planning I always get the same reaction – how can you know now what you will spend 6 months from now? In our lives anyway there are really very few surprises. We buy about the same amount of groceries every week. We each fill our gas tank once a week. The mortgage and property taxes are fixed amounts that are automatically withdrawn from our bank account. Based on previous years (here’s where the detailed tracking helps) I know what our electric bills will be in summer vs winter. I put in $200 for the dog’s annual visit every May. I know the day of the month the phone, cell and internet bills will be charged to the VISA. It’s no surprise, they are all predictable months/years in advance. The unknowns are all the nonessentials in life. Because we live pretty frugally in most ways and earn two good salaries, we have excess income each week. Because we so seldom buy clothes or eat out we don’t even budget for them. It’s too hard to predict when we’ll spend in either category so when it happens it just gets added to the spreadsheet and there’s slightly less excess that week. I don’t bother categorizing our expenses in anyway. I did it years ago just for fun and found that we were well within the recommended guidelines. At first glance we do spend more than the recommended percentage on housing, but that’s because we are paying down our mortgage on an accellerated plan. I also find the recommendations of 10-15% for savings amusing and aim for 30% as a bare minimum. Although when you have no car payments, no debt repayments, and generally live pretty frugally that does free up a lot of cash for other things. At first tracking every cent was a little bit of a pain, but the first few months let us know that we could cover the basis just fine on one income and the other was therefore available for retirement savings, extra mortgage payments and occasionally a terrific trip. If I didn’t know precisely what we “ought” to be spending, I suspect the excess would be wasted on forgettable consumption instead of consciously putting it toward getting us to early retirement and the next great holiday. Those aren’t everyone’s priorities, but once you identify what you are working toward, it sure makes it easy to do the little extra work it takes to monitor your spending to make sure you stay on track.

On the subject of using receipts; I always keep my receipts for a back up. but once a week I see whats left from my account and make sure the amount deducted adds up to the correct amount. I find it more effient and less time consuming to track expenses on a weekly basis.

While I try to write stuff down as soon as I spend anything, often I find myself going over my credit card statements to fill in the gaps every few days.

For overall tracking, I have a Google spreadsheet so that I can access and update it from anywhere with internet access. My categories are pretty broad. Note that I’m only tracking MY spending right now, not our shared spending as a couple and a household. Oh, and they’re in totally random order:

-joint contribution (what I put into the account we share for bills and such)
-personal savings account
-car maintenance
-student loan
-credit cards (old debt I’m paying off)
-gas
-commuting (I’m in a vanpool)
-medical expenses
-entertainment
-eating out
-household
-wedding (tracking expenses for our upcoming wedding; the darn things are expensive!)
-gifts
-food (grocery)
-vacations
-health insurance
-clothing
-other

With such broad categories I used to be bothered by not knowing exactly what the number meant (did I spent that $50 in ‘entertainment money’ on movies or games or what last January?), so I found a compromise that let me retain that information without having to make umpteen little fiddly categories. I’ll have one column for the amounts, and then one next to it for a list of specifics (‘Hoodwinked DVD, Amazon MP3s for ballroom dance, Dungeon Siege III’). I can always make the column small so it doesn’t take up much horizontal space, and then expand it if I get curious. Also, I highly recommend having an ‘other’ category, as long as you can track what actually goes in there. It avoids the existential crisis when you can’t seem to fit a random one-time expense into the existing categories.

Oh, and breaking groceries down by type? Totally too much work. Don’t bother, unless you REALLY groove on it.

1) Payment Type: I try to put everything possible on plastic (either credit or debit – usually credit). Obviously it goes without saying that I pay my CC bill in full every month.

2) Adding it up: At the end of the month I take a look at my accounts and total everything up using a spreadsheet I created in Excel. I especially like doing my CC trx because I can export them and then use the magic of pivot tables to cut down my work.

3) Bill splitting: For me, the total bill gets attributed to one category. So if I bought a packet of transit passes at the grocery store along with my groceries, it goes into the grocery category instead of the public transit category. I go by the motto “the perfect is the enemy of the good!” (Wonder where I heard that ) I’d prefer if everything was perfect, but it’s good enough.

4) Receipts: I don’t use receipts. Receipts are bulky and annoying. I don’t save them and don’t rely on them for record keeping.

5) Cash: I don’t track spending in cash, instead I simply track ATM withdrawls and deposits. I have a general idea of what I spend cash on and can confirm that I use very little of it via my “ATM withdrawal” and “ATM Deposit” categories.

6) Choosing categories: My categories have evolved logically over time. They include things like Rent, Utilities, Groceries, Dining Out, Shopping, Entertainment/books/music, Travel, Liquor, Salon/Spa, Gas, Car Expenses, Public Transit, Charity, Gifts…and so on. When the need arises I create a new category and use it going forward. Just like JD, I try to keep it simple and only drill down when I find I’m not getting the information that I need (that’s how Car Expenses became distinct from Gas).

7) Electronic Tools: I don’t use tools like Mint.come to track my spending because I feel too far detached from the information when I do. However, I think this is a great option for people who don’t enjoy the process like I do. I do use a few electronic tools though to make things easier. I used to use a spreadsheet in Goggle Docs, but eventually it became slow because there was too much info in the sheet. At that time I switched back to Excel (delightful, full featured Excel!) and store the document in my Dropbox so that I can access it in a variety of locations. And of course I have all electronic accounts and statements to make gathering the info easier.

Hope this is helpful to you! I now have years worth of spending tracked and it’s been very valuable for me. I’m constantly surprised by how few people do this. But then, I’m weird and I genuinely enjoy completing the task.

I used to budget in much further detail but realized that it didn’t matter what I was spending it on as long as it was within my budget. If I want more details I can use the other features Mint provides (trends, etc).

I am using a personal finance software, similar to Quicken. I used to break my expenses down to the most detailed level (e.g. vegetables, meat, etc.), but in the end I found this very irrelevant. Now, I categorized my expenses according to its purpose, or function. For example, I use a category “Food and Beverage”, which I split into ‘Groceries’ for the necessary food I buy in the supermarket, and “To Go”, which is food and drinks that I buy quickly on the go.

My restaurant expenses, on the other hand, are categorized under “Sports & Leisure”, just as Cafes and Bars, as well as Cinema or Health Clubs.

My main purpose is not to track exactly WHAT I spend my money on, but HOW I spend my money, which pretty much reflects my mood, or how lazy I am in a given month. For example, when I am single, I spend less time in restaurants and more time in bars. Being in a relationship, my restaurant expenses have gone up.

I usually do not use budgets for individual categories, since I do not want to limit myself too much. However, the software will tell me my expenses during any given time in the month. Thus, I set an expense limit for each month, and stick to that, while being flexible how I spread it over the different categories.

Cheers,
Alex

My wife and I both have accounting backgrounds so our budget is already a bit more complicated than the average person’s budget. But even we only have two categories for food; groceries and eating out (actual our eating out is combined with out ‘entertainment’ category.

However now that it is in my head, I am curious how much we spend soley on ice cream! Usually it just gets lumped in with groceries.

For me, the single best way to keep accurate records is, after every purchase, make a note in my smartphone’s notepad function. I keep a file for each month, and assign my categories at the end of the month in an excel file. I barely even think about it now – after paying, all it takes is a glance at my receipt and I’ll enter the information in shorthand into my phone.

Bonus, nobody will ever ask what you are doing/look at you strangely, and just assume you are sending a message.

I am wondering, however, if there is any place that would allow me to see how my spending compares to the national average. I like to think I’m a frugal person (80% of my food expense is for groceries/cooking at home, 20% is for dining out), and definitely within my budget… But is under $600 for food for 2 adults high or low? Am in the San Francisco (California) area and probably buy about 75-85% organic groceries. Of course, my groceries includes both food I plan to cook/eat now, and stocking up non-perishable items when they go on sale. I could probably eat for weeks out of my pantry and I will stock up when organic beans are on sale at 0.89 each (I have 20 cans of organic chickpeas in the pantry right now)

Cash expenses I round upwards, so if a bill is €11.36, I enter it as €12.00 and at the end of the day put coins in a jar, which I will cash in coming up to Christmas and it never fails to astonish me as to how much it adds up to.

I budget using the GRS / All You’re Worth ‘Balance Money Formula’
There are three main categories of Needs, Wants and Savings. Keep it simple sub-categories – Rent, Bills, Charity, Holidays, Savings, etc. To me all expenses matter so I track them all but a simple system matters more so I have broad categories for those expenses.

Being able to see all your purchases in pretty much real time is great – especially since there’s an iPhone app for Mint. If I had to record every purchase by hand or even in other software, I’d never do it.

But reviewing purchases a couple of times per day? No problem.

We have our household, utilities, food, vehicle, pets, savings, travel, and kids as categories. receipts are placed by the computer and the budget software allows us to download from our checking accounts. we are then able to quickly click through debits and assign the category. If there is not enough money in that category, the balance goes red and we have to cover it within the budget. I like this software because it is easy to split a transaction into several categories by just clicking on them. Very nice.

I remain fairly frugal all my life so to me i only spend on big items and necessities.

Because of that i use a Quicken solution.

I basically create virtual accounts for each broad categories

-personal utilities spending account
-household spending account
-investment warchest
-spending buffer account
-transport account
-vacation account

when i spend i usually can remember the amount off my head. hey its not possible to spend so much. if its groceeres i keep the receipt. then i enter into my quicken.

i kept till date 8 years of data on this.

that is not to say it has helped much.

you can view how i set this up over here > http://www.investmentmoats.com/budgeting/how-to-budget-with-envelope-budgeting-to-save-money-easily/

It started 4yrs ago when my husband was laid off and I didn’t have a good sense of what our very basic expenses were and how much was discretionary. Kind of important to know when you go from two incomes to one. I only intended to track everything for a month or two to see how much panicing over the layoff was warranted. To my surprise and disgust I learned our absolute basics (assuming we stayed in our current home) were covered by 55-60% of our income and the rest was not officially allocated. Kind of disturbing to find out how much we were wasting without thinking about it. With a year+ of severance pay he received, of course we were fine, but the exercise of analyzing our in/out flow of cash was life changing moment in our lives. Ever since I’ve had an endless running list down an Excel spreadsheet (4 years in and I haven’t reached the limit on the number of rows in a spreadsheet). I list out the expected essentials for every week for the next year. As the weeks pass I replace the plug number with the actual expense. Virtually everything is paid on our VISA for the flight mileage and every Friday after the pay is received, I pay off all the charges that have been processed (view my VISA account online). Then I transfer out any money in the account over $1000 and contribute to our retirement accounts or make an extra mortgage payment. Because we live so far under our means (by choice) there is always excess at the end of the week. If we spend on anything that was not listed as a planned essential we just have that much less “excess” to transfer out that week. If we want/need to plan for a big expense (take a vacation, replace a car, redo the roof etc) we just don’t do those weekly transfers and let the excess accumulate. Because we’re so used to spending only the essentials there is no temptation to spend the money sitting there. In our minds it’s all tagged for a specific purpose and we consider it already spent.

Having our entire year of essential spending mapped out in advance means I can see how much extra we’ll potentially have if we do absolutely nothing extra. Of course that won’t happen. Sooner or later we will actually eat in a restaurant, but because we don’t plan to do it and enter it in a a budgetted item, we don’t feel like we’re supposed to, or that we’ve already given ourselves permission. Same with adult allowances. If we want something and feel it’s worth the price we get it. I am absolutely sure if we allocated ourselves $X per week we would spend it. Because there is nothing extra in the plan, every purchase gets the proper consideration before we do it. We buy 3yr old cars, always pay cash and drive them until they go to the dump at 10-11yrs old. We don’t have cable or satelite, we eat out maybe 6 times a year on birthdays. To someone who lives to go out that would sound like torture, but those things couldn’t be less important to us. Instead we spend wildly (according to a vocal and critical aunt) on our vacations. It’s our one splurge in an otherwise frugal lifestyle and I wouldn’t have it anyother way. We intend to retire early and other a big trip every other year (eg month in Europe) we life a very simple lifestyle. I love reading about how others track their spending, but the bottom line is the less you spend the less there is to track…

More, because if I bought a bottle of water then I would get where I was going and only have $24 instead of $25 and I would remember why. It just depends how you think about it.

I still like to write down every expense in a small notebook so I can easily glance back at a certain time frame. I have to admit though, I have been slack about doing it this past month.

I definitely like the google docs idea and while I do not have a smartphone, that sounds like the perfect way to upgrade my old paper and pen day planner system.

http://thesmartnickel.blogspot.com/2011/05/budgeting-app-spendinglite.html

http://bugsplat.info/2011-07-09-program-your-finances-reporting-for-fun-and-profit.html

Ledger probably is only a good fit for you if you’re already comfortable with the command line and plain text files, but if those two fit you then you’ll get a lot out of it.

I invest and save heavily. I’m building wealth at a rate $17k per year, on a 48k annual income. Where the rest of it goes doesn’t matter.

Other expenses like kids clothing/shoes/car repair/home maintenance goes onto credit card and that gets paid off monthly.

The bank has an 800 number that can be dialed to get a balance of the account but we find that the balance is not always 100% accurate. I found that out the hard way after overdrawing and ended up paying $35 overdraft fees. With the system we have now (conscious spending + writing things down), we have not had an issue.