University of Idaho Extension

Tracking Expenses

Receipts graphic


For a month, account for every penny you spend and assign it to an expense category.

Once you’ve defined your financial goals and are on a steady path towards achieving them, it’s time to find the money you need to reach them. That’s easier if you already know where your money is going. Tracking expenses can be very intimidating: people generally don’t like to think about every  penny they spend. But if you remember that you’re working towards a goal, it will be much easier to do what’s required in order to stay on track.

Before you begin monitoring your spending, think about how you currently keep track of your daily life. Do you do better with sticky notes? Day planners or calendars? Computer software? There are lots of popular tools for tracking expenses and for helping you observe and better understand your spending. One size doesn’t fit all. Mix and match them and see which tool (or tools) best fits your family’s needs. Or, you may find that something you’re already using will serve as a great expense-tracking tool.

PenniesFor a month, account for every penny you spend and assign it to an expense category. You’ll find this  expense tracker, adapted from University of Illinois Extension, useful in completing this task. You’ll need to track every transaction—even sneaky expenses, like the soda you bought for your afternoon break.

Be prepared: this can be an eye-opening experience, but keep going for a full month. The idea underlying expense-tracking is to put control of your spending back in your hands. If you don’t know how much money you have, how do you know when to stop spending? If you do know, you’re less likely to overspend and more likely to improve your control over your financial future.

Tip: If you use a “Miscellaneous” category with any tracking tool, you won’t get the full benefit of tracing your spending footsteps. You need to break down all expenses into their appropriate categories (for example, Entertainment/Recreation, Clothing, Transportation, Food, etc.) to see exactly where your money is going.


  • Online banking: Most major banks, and some smaller ones, offer online banking to their customers for free or for a small fee. Online banking and electronic bill-paying take the paperwork out of your bill-paying routine, can save time and postage, and provide instant information regarding your account. You can use this tool’s monthly record of your transactions to categorize and total your expenses. Beware of bank or vendor charges for this service, however: you may find that you’re paying more in fees than you would have if you’d stuck with snail-mail.
  • Personal finance software: Whether you buy personal finance software or make up your own spreadsheet, this tool can provide up-to-date spending information with accurate computations. It’s an easy way to identify different spending categories and to maintain accurate records for tax time. Some software packages also print checks, balance your checking account, link to your accounts, and graph your spending.

  • Credit cards: If you use credit cards to pay for all of your purchases, their monthly statements will help you track your expenses. Simply go through each statement and note which expense category every purchase falls under. Add up the categories for a monthly estimate of spending. Many websites will keep track of your credit card spending—as well as your non-credit card purchases—for you. If you choose this tool, remember to pay your credit card accounts in full before their due date to avoid additional interest and fees. See Credit & Debt for information on using your credit cards wisely and how new credit card legislation might affect you.

  • Checkbooks: If you use checks and/or debit cards to pay your expenses, your checkbook can be an excellent tracking tool. When you buy an item or service, record the check or debit purchase in your checkbook and/or debit-card register and make a note of its category in the register’s “For” section. (If you don’t have registers for your checks or debit cards, ask your bank for them.) At the end of the tracking period, total up your expenses for each category. Balancing your account monthly is another way to track expenses and verify that you and your bank agree on your balance and cash on hand.

  • Day planners and notebooks: You can use these paper tools to record your daily expenses and to note the expected dates of your income and the due dates/amounts of your bills. Your favorite calendar will work, or you can list your expenses in a notebook in order of their due date. Be sure to enter every expense, however small. Don’t forget periodic expenses like gifts or twice-a-year insurance premiums. As you pay a bill, mark it off.

  • Receipts: To use this more traditional tool, save—or make—receipts for every service or product you buy. Label each receipt with an expense category, like food, transportation, rent, cable, etc. Sort the receipts by category, store them in a safe place, then add up each category at the end of the tracking time.

  • Envelopes: This simple, older tool can still work well for those who prefer paying by cash. Make a separate envelope for each expense category and write its name, budgeted amount, and relevant due dates on the outside. After receiving your income for the month, divide the cash into the appropriate envelopes and put them in a safe, locked place. When you remove cash to pay for expenses, trade the money for a receipt. (If you use a money order to pay a bill, include the money order fee in the expense’s total.) You’ll know you’re spending below your means if there’s money left over in an envelope. (Great job!) If the money is gone in any category, resist the urge to spend cash from other envelopes.

Once you’ve found an expense-tracking tool that works well for you and your family, stick with it. Make “dates” with your record-keeping and bill-paying so you can stay current during your month of tracking expenses. If you find that you’re not being “faithful” to a tool during that month, explore the others. Discover what works for you.

Tracking expenses is a step you take when you’re building or reevaluating a budget. Once you’ve tracked your expenses for a month, it isn’t necessary to keep on doing it unless you need to reexamine your spending. Once you have a workable budget, your expenses will track themselves.

Breaking Spending Habits

After accounting for every penny, are you shocked by what you’ve been spending? That’s OK. If you think you need a little help with breaking some spending habits, visit these useful resources:

Discovering that you’ve been overspending doesn’t mean you have to put your financial goals on hold. Get ideas for reducing common household expenses and keeping your dream on line by visiting Spend Less, Live Well.

Developed by:

Karen Richel
University of Idaho Extension Educator
P.O Box 8068
Moscow, ID 83843
(208) 883-2267

Marilyn C. Bischoff
University of Idaho Extension Professor and Family Economics Specialist
322 E. Front St., Ste. 180
Boise, ID 83702
(208) 364-9910

2014 Update by:

Nancy M. Porter, Ph.D.
Extension Personal and Family Finance Consultant
University of Idaho
(864) 650-8289

Other credits:

Educational Communications,
University of Idaho College of Agricultural and Life Sciences:
Editing: Marlene Fritz, Communications Specialist, Boise
Web Design: Jacob Peterson, Web Designer, Moscow

Start of page