5 Steps to Start Tracking Your Expenses

Last month, a friend texted me a screenshot of her bank account balance: $47. She’d been paid $3,200 two weeks earlier. She had no idea where the rest went. Not a clue. That’s not unusual. A 2024 Bankrate survey found that 49% of Americans have less savings now than a year ago — and most of them can’t pinpoint why.

The fix isn’t a better salary or a stricter budget. It’s knowing what you spend. Here are five steps to start tracking expenses, starting today.

---

Step 1: Pick One Goal (Just One)

Skip the 47-point financial overhaul. You need a single, specific target.

Bad goal: “Save more money.” Good goal: “Save $500 for a weekend trip by March.” Bad goal: “Spend less on food.” Good goal: “Cut takeout spending from $280/month to $150/month.”

One goal gives you a filter. Every time you log a purchase, you’ll automatically measure it against that target. It turns expense tracking from an abstract chore into something with a point.

Write your goal on a sticky note. Put it on your bathroom mirror, your laptop, wherever you’ll see it daily. Sounds corny. Works anyway.

A common mistake: picking a goal that’s too far away. “Save $10,000 for a down payment” is a fine long-term ambition, but it won’t motivate you to track a $6 sandwich today. Pick something you can hit within 30 to 90 days. Once you reach it, pick the next one. Momentum matters more than ambition at this stage.

---

Step 2: Choose Your Tracking Method

There are three realistic options. Each has tradeoffs.

A notebook or notes app. The lowest-friction option. You write down what you bought and how much it cost. No setup, no learning curve. The downside: you’ll have to do all the math and pattern-spotting yourself. And it’s easy to forget entries when you’re busy.

A spreadsheet. Google Sheets or Excel gives you formulas, charts, and categories out of the box. You can see monthly totals update in real time. The tradeoff is maintenance — you need to sit down and enter data, usually at the end of each day. Most people who quit expense tracking were using spreadsheets and got tired of the manual entry.

An app on your phone. The fastest method in practice because your phone is already in your hand when you buy something. Most apps handle categorization and charts for you. The catch: some apps are bloated, some cost money, and it takes a few days to find one that doesn’t annoy you.

There’s no objectively best method. The best one is whichever you’ll actually use for more than two weeks. If you’ve tried spreadsheets before and abandoned them, try an app. If apps feel fiddly, try a notebook for a month.

---

Step 3: Track Everything for 30 Days

Not some things. Everything. The $1,400 rent, the $4.50 iced coffee, the $2 parking meter. All of it.

Here’s why this matters: most people already know their big expenses. Rent, car payment, insurance — those are predictable. What eats budgets alive are the small, forgettable purchases that add up over 30 days. A $12 lunch here, a $7 impulse buy there. One month of full tracking usually reveals $200-$400 in spending that people had zero awareness of.

The key habit: log purchases within 60 seconds of making them. At the register, in the parking lot, standing on the sidewalk. The longer you wait, the more likely you’ll forget — and “I’ll catch up this weekend” is how tracking dies.

Don’t worry about getting the exact amount right every time. If your lunch was somewhere between $11 and $13, log $12 and move on. Perfectionism kills more expense-tracking habits than laziness does. A rough number recorded beats a precise number forgotten.

For the first 30 days, don’t try to change your spending. Just observe. You’re gathering data, not enforcing rules.

---

Step 4: Sort Into Five Categories (Max)

After your first week or two, patterns will emerge. Group your spending into categories — but keep it to five or fewer. Beginners who create 15 categories abandon the system within a month because every purchase becomes a decision about where it belongs.

Start with something like:

• Housing — rent, utilities, internet
• Food — groceries, restaurants, coffee shops
• Transportation — gas, transit, rideshare, parking
• Recurring — subscriptions, insurance, phone bill
• Everything else — clothes, entertainment, gifts, random purchases

That’s it. You can split categories later once tracking feels automatic. Right now, the goal is to see roughly how your money distributes across your life. Most people discover that one category is consuming a disproportionate share — often food or “everything else.”

Once you can see the breakdown, you don’t need willpower to spend less. The numbers do the persuading.

---

Step 5: Review Weekly (15 Minutes)

Set a recurring calendar reminder — Sunday evening works well. Sit down for 15 minutes and look at what you spent that week.

You’re looking for three things:

Surprises. Anything you don’t remember buying, or amounts that are higher than you expected. A $65 dinner you thought was $40. A subscription you forgot about.

Patterns. Do you spend more on weekends? Do Tuesday lunches out keep showing up? Is there a specific store where you consistently overspend?

Progress toward your goal. If your target is saving $500 by March, are you on pace? If your target is cutting takeout to $150/month, where are you halfway through?

This weekly check-in is where expense tracking pays off. Without it, you’re just collecting data. With it, you’re making decisions based on evidence instead of guesses.

After a month of weekly reviews, you’ll know your spending patterns better than 90% of people. That’s not an exaggeration — most adults have never sat down and looked at where their money actually goes.

---

A Tool That Makes This Easier

If you’d rather not manage this manually, Receiptix handles a lot of the friction. You can enter expenses by hand or use voice input to log them on the go — say “lunch at Thai Palace, $14” and it’s recorded. It categorizes spending automatically and generates charts that show your weekly and monthly breakdown at a glance. If you’re tracking expenses across currencies (say, after a trip), it handles the conversion too.

Receiptix has a free tier that covers manual entry, basic categories, and spending charts. That’s enough to follow every step in this guide without paying anything.

---

The whole point of tracking expenses isn’t to become obsessive about money. It’s to remove the mystery. Once you know where your dollars go, decisions get easier: you cut what doesn’t matter to you, keep what does, and actually hit the goals you set. Fifteen minutes a week and a single app or notebook — that’s the entire system. Start today, and in a month you’ll have a clear picture of your spending for the first time. Receiptix can speed that up, but the habit is what counts.