How to Track Your Monthly Expenses: 8 Tips to Try

Tracking your expenses on a regular basis can give you an accurate picture of where your money is going — and where you’d like it to go instead.

Then, by using a budget, you can accurately account for all the bills you need to pay going forward. But before you start plugging numbers into a spreadsheet or app, take a minute to list out each of your expenses.

Here’s how to get started.

Pinpoint your money habits by taking inventory of all of your accounts, including your checking account and all credit cards you have. Looking at your accounts will help you identify your spending patterns.

Begin by grouping your expenses into different categories. Categorizing your expenses will help you track how much you’re spending, and see where your money is going.

Some personal finance websites and credit cards automatically tag your purchases in categories like “department store” or “automotive” to help you identify themes. You might find that those impulse buys at Target are costing you a lot. Or maybe you’ll realize you’re paying for recurring subscription services, such as Spotify or Babbel.

If you’re using the 50/30/20 budget, divide your net income into three categories: 50% for needs, including minimum payments on debt; 30% for wants; and 20% for savings and debt paydown beyond minimums.

Sorting expenses into needs and wants can help you organize your budget and prioritize spending, especially if you need to cut costs to make room for savings or debt repayment. Here is a breakdown of each category in the 50/30/20 budget.

These are expenses you cannot avoid, including monthly bills. If you use the 50/30/20 , these should account for 50% of your spending. Necessities often include the following:

These expenses, also called discretionary expenses, may be harder to account for in a budget, as they don’t always come with a set monthly fee. If you use the 50/30/20 budget, wants can account for up to 30% of your spending.

This is the money you’re putting toward your retirement, emergency fund and other savings, and using to pay down high-interest credit cards and payday loans. It also includes anything over the minimum payment on other debts, such as your student loans and mortgage. In the 50/30/20 budget, this should account for 20% of your income:

These types of apps will work if you’re willing to log your purchases, put in the time and stick to your budget. The key is to regularly monitor your expenses. Consider setting a schedule for yourself, such as reviewing your budget on a monthly or quarterly basis.

If you have a more complex financial situation, such as investments or a small business, you might consider Quicken, which lets you import bank transactions and monitor your investments. Quicken offers customers cloud and desktop software with extensive budgeting and tracking features.

The key to successful tracking is to regularly monitor your income and expenses. By paying attention to where your money goes, you can identify patterns in spending that can help you make better financial decisions.

Set a schedule for yourself. Review your budget on a monthly or quarterly basis and make adjustments as necessary. An annual review may also be helpful to discover which months you tend to overspend.