Why is financial tracking so important? Well, if I don’t know where I am, how can I know where I am going? Tracking our finances is key to being able to tell our money where it needs to go versus it disappearing on us.
There are a multitude of ways to do so, but I would like to talk about the most common ways.
Paper and Pen
This is the traditional method. I keep a ledger of what I spend via paper or a form of my choosing. I then enter each category’s talley into that month’s actual budget. By doing this on a daily basis, I am able to see how much I have spent of my allotted amount and make sure that I don’t go over that total. I personally like the 30 Day Diary form and Monthly Income and Expense form available from Crown’s library. That along with the Income Allocation form which helps you decide which paycheck is going to cover the mortgage or car payment is the way I learned to budget, and I still use a system very much based off that.
The use of Excel and similar products has become common place, and they are excellent budget tracking tools. I have taken the formatting of the 30 Day Diary, customized it to my family’s needs, and use it in Excel as my main method of budgeting. Over time I have added special categories like cats, chickens, and cows under miscellaneous as my family lives on a farm. That helps us to see what they are actually costing us each month. A budget and tracking system is not concrete…you can make it work for your family. The nice thing about Excel is that it does all the math for you using the built in formula system.
This past year, I began using Mvelopes for my personal budget and fell in love with it. Since I started in mid-year and wanted to take my time to learn it, I have used both Mvelopes and my faithful Excel spreadsheet, but come next year, I will be going solely to Mvelopes. The nicest thing about their system is that I can tie it to my bank accounts and allow it to automatically import all my electronic transactions and even my checks once they are deducted from my checking. You can use their pre-entered categories, create your own, or even create categories and sub-categories. It is totally customizable as well and is accessible from anywhere which makes it extra nice. I can even set up my income allocation and use that preset distribution to fill my envelopes as well as set up pending deductions that haven’t yet hit my bank. Add to it that they have great tech support that is here in the US, and I’m a happy camper.
Many people like using Money to budget and track their expenses, but since I don’t actively use it, I’m neither for it or against it. It just deserved a mention. There are also many other options out there. Too many to name, but the key is to find what works for you and track it!
Note from Jason: Microsoft decided to quit producing Money Plus over a year ago, but it is available for free download. Keep in mind, they are giving the software away and no longeroffer support or online features. You can read more about Microsoft Money Plus on the download page.
How do you track your spending?