Expense Tracking

It feels so good to be writing again! The past few weeks have been super hectic and stressful, to the point that I was already suffering from an upset stomach and experiencing mild anxiety attacks. But I survived and I've learned that no matter how I try to avoid stress and stressful situations, they are part and parcel of life so I must find a way to effectively manage and deal with them. Another thing I discovered was that I do not succumb to stress eating, in fact I do just the opposite and have to force myself to eat in stressful situations. All the more reason to manage my stress, otherwise I'll end up starving myself to death.

But at least it's over and while I can't scream freedom just yet because something equally challenging is looming ahead, I know that the worst is behind me and that I survived the trenches. Whew.

Moving on, I'd like to talk about how my expense tracking has been going. Tracking expenses is one of the basic tenets of personal finance, because how can you manage your money if you don't know where it's going. I've even advised several people who were battling debt to do just that to get a handle on their spending. However, despite its many benefits, I've never tracked our expenses, instead, I used an envelope system type of app where I would punch in our monthly budget and then deduct the expenses as they happened throughout the month. We usually stay within budget so I was never concerned enough to start tracking our expenses.

That all changed when I read "Your Money or Your Life" and one of the key concepts there was to track every centavo spent vis-a-vis the monthly income and when I did that, I was shocked to discover that we had a deficit in my first month of tracking. Apparently, we had all sorts of little expenses (i.e. gifts, books, clothing etc) that didn't amount to much individually but ended up being quite a pretty penny when added up. So far in the 3 months that I've been tracking expenses, the only time that my income surpassed our expenses was in December. Pathetic, but hey, things can only go up from here right?:p

IMG_2822I use a freebie notebook and a blue pen in tracking my expenses. Then I adopted a simple In and Out method and write down every single thing I spend on, as well as how much I bring in. The first few days of tracking might have been mostly guesstimate, but once I developed the habit, I automatically whip out my spiral notebook and jot down my expense within a few minutes of the money leaving my wallet.

The immediate goal is to keep our expenses below our income (duh!). Next is to achieve a Starter Budget as suggested in Money After Graduation.

step0001Then after I've completed our emergency funds and paid off our debt to my parents, we can work our way towards the Wealthy Budget and beyond.

step0006The good news about our budget is that we usually hit the 35% housing budget recommendation under the Starter Budget and are well below the 15% transportation because we fully paid off our car loan more than 5 years ago. But our Other category is way above the recommended 25%. This is where those little, unseen purchases rear their ugly heads and the place where our budget needs the most work on.

I highly recommend tracking your expenses because it promotes intentional spending. Right now, because I know that I'll be listing down every expense, I think twice about buying something and reflect on how such purchase will affect our monthly summary. This has saved me from impulse purchases and has forced me to slow down on buying furniture for our condo, meaning that we'll have to make do with our hand me down couch and live with a mattress on the floor for a few more months.

It will probably take a good year or two before we achieve a Starter Budget, and even longer for the Wealth Budget, but every day leading to that creates wealth building habits and those habits are what differentiate the financially free from those enslaved to debt.

Happy weekend everyone!


edelweiza said…
I cannot overemphasize the importance of expense tracking. I also use the In and Out method to track where our money goes! Gamit na gamit ko 'to lalo pag weekends! Di ko alam na method pala sya, naisip ko lang kasi na isulat sa Notes ng phone ko dahil mahilig nga ako magsulat ng kung anu-anong notes na naiisip ko bigla-bigla. Effective yan sakin, tapos pagdating ng Monday binabalanse ko ang finances, isa yan sa nilo-look forward ko gawin pag Monday (na sa PC ko naman ginagawa). :)

Baligtad naman ako, emotional eating. Pag stressed, madami nakakain lalo. Kaya urong-sulong ang weight ko. Kaya ka pala slim! Pero don't make it a habit, kasi sabi mo nga, you might die in starvation. Hehe.
Jillsabs said…
I can relate with the looking forward to balancing the finances, but I balance once a month. Tapos mejo exciting to see what the results are:p

I'm eating normally again! Stressful days are finished or at least I can better manage my stress now. It's a skill pala, dealing with stress. You get better with it with time and practice.
Jaki said…
Hi Jill, i find the "Personal Expense" app very useful in tracking expenses. A category can be set for each expense and one can track on a daily, weekly, or monthly basis.
chasen said…
Hay naku Jill! Ningas kugon ako sa pagtrack ng expenses. Parang nasasaktan ako pag madaming nasusulat. hehe. Pero gagawin ko ulit...now na! Thanks for always inspiring me.
Jillsabs said…
Thanks for the reco! I'll definitely check out that app.
Jillsabs said…
What do you use to track your expenses? Some people like using apps while some like the manual exercise of putting pen to paper. I personally prefer writing down my expenses in a notebook because I'm a notebook kind of person (I have 3 different notebooks in my bag!) and I'm old-skool:p

Maybe you just need to find what method suits you best so you can develop the habit of tracking your finances and before you know it, it becomes an automatic act.
Jaki said…
My bad, the app's name is Expense Manager.
Cherrie said…
I was using notebook and pen method last year. But I hate bringing a lot of things when I go to work. So I tried downloading an app but it didn't match my lifestyle. I needed to tweak a lot. What I did, I created an excel file. Copied some ideas from the app that I downloaded and customized it to my kind of tracking of expenses. It even have a tracking tool for my credit card expenses and due dates cause I have 3. Tama ka nga. Whatever suits us best. The main goals are to track our expenses, to manage our expenses and to motivate us to continue tracking it. Hirap lang kapag hindi nagbabalance eh.. haha
andie said…
i love expense tracking. BUT.... my husband does not. so the benefits are only half as much. ang hirap di ba??!
Jillsabs said…
Nakaka OC kung hindi nag-balance no? But when it does balance, mapapasigaw ka talaga sa tuwa:p
Jillsabs said…
Hi Andie,

I can relate so much with what you're going through. I'm super envious of couples who pore over their monthly expenses and have joint financial goals, because that's not my situation with my husband.

However, I try not to dwell on it because envy only leads to darker feelings. So I focus on my own expense tracking and get him to contribute a certain percentage of his earnings to our monthly budget. As long as he's able to do that, I don't care anymore how he spends the rest of his money. That's what works for us.
andie said…
Agree that we should not dwell on it.

Its been a few weeks since my husband relinquished his ATM (voluntarily ha, baka kasi ma judge ako), since he could not find time to do errands (bill payments). both payroll atms are now with me, so all bills are paid by me (whether online or traditionally).

then, every sunday, we withdraw our weekly allowances for each of our daily office expenses (parking, lunch, coffee). the assumption is that all other expenses (house expenses and grocery) have been paid provided already. if we end up paying for anything non-allowance, refundable na lang.

so it sort of forces him to track some of his expenses otherwise he will not be able to ask for reimbursement. harsh ba?! di naman siguro kasi the same rule applies to me. so far it works, and im hoping we could stick to this rather than forcing him to track all his expenses.
Jillsabs said…
Hi Andie,

It's great that you and your hubby are both onboard with your budgeting system. I'm crossing my fingers na tuloy-tuloy na yan or that you'll be able to refine it even more to suit your family's needs.
[…] once tracked my income and spending through a very old-school pen and paper method. I liked the whole exercise of jotting down every single one of my expenses because it made me […]

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