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Pros and Cons of Tracking Your Spending Manually

After I mentioned to a coworker that I had a blog about personal finance, he told me that he and his wife combined their finances over the summer. This was a big deal for them, since for the first 9 years of their marriage, they kept separate accounts. They still have individual accounts, but they do all of their real spending out of their joint account (bills, groceries, etc).

He explained that they kept track of the accounts on their computer. Apparently, instead of using Quicken, Quicken Online, Mint, or the like, they use a Mac program called Checkbook. Because they had trouble linking it to their bank account, they enter each transaction manually into the program, just like balancing a shared digital checkbook.

At first I was a little surprised, I didn’t think anyone would have the discipline to do that. So I asked how it was working out. He said that it had transformed the way they looked at their finances.

Before, they had a general idea of things, kept track of their balances online. By entering the numbers and using the categories, he and his wife are able to see how much money they spend on things every day, every week. He said they spent a lot more money on groceries, snacks, and restaurants than they’d realized.

This sounded like my experience with manual tracking. I like Quicken and Mint, but sometimes it helps for me to sit down with a spreadsheet and see what we really do spend. It’s intimidating and I think it’s important for everyone to do for at least a month at some point. It changes the way you look at your spending.

Since he seemed pleased with the system, I asked him if they’d found any problems. He said that the only one they’d run into was actually entering the data. That’s why I gave up and started using tracking programs (and getting my info from them periodically). If you’re too tired one night, busy the next, things start to back up. And before you know it, you’ve lost receipts, notes, and know you’re missing important data.

Is there a best way to keep track of your money? Ideally, I’d say that manual is still the best. Putting the numbers in yourself really brings home your spending habits.

But it’s hard to keep up with everything manually. That’s why I recommend using software such as (free) or Quicken Online (free) to track your bank accounts. This way, you can always get a quick picture of your finances in one place. And by taking an hour or less a couple times a month, you can tally up your spending by category without worrying about saving receipts (except for cash) or finding time every day.

I don’t think there’s a right way, except doing it. Or, perhaps, the only wrong way of doing it is not doing it at all.

How do you keep track of your spending? How do you watch your accounts?

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amanda January 12, 2009 at 7:08 am


I use a manual program like your friend. I was worried that with an automatic one, I would never check it. So what would be the point of that? I just take a few minutes every night to enter my receipts and take a look at how we’re doing.

This is my first month doing it so I do worry how it will go once the novelty wears off. I may switch to an automatic after that but until then, the manual one is working out great.

Little Miss Moneybags January 12, 2009 at 9:37 am

My boyfriend and I track our expenses seperately on Excel spreadsheets that we developed. We’ve been doing it for years before we met. It’s the single best personal finance tool I can use–at first it was a way to figure out where my money is going, then it became a way to make sure I was staying in budget. It can be a little overwhelming to keep up with, but we each keep ours on a thumb drive so we can update it anywhere we have access to a computer. I used to keep mine on my Palm so I could update it anywhere and anytime.

Saver in the City January 12, 2009 at 11:31 am

I track my expenses manually with an Excel spreadsheet as well. I used to use Quicken but for whatever reason certain expenses didn’t download correctly so then I’d have to go in and change them manually anyway. After tweaking my Excel spreadsheet for about a year, it’s now exactly how I want it and it shows me everything I need to know to ensure I’m budgeting/saving as I should.

Christine January 12, 2009 at 12:15 pm

I track them manually on a spreadsheet as well. Sometimes I do let things pile up a bit and then I just add a round number close to what I’ve actually spent — because usually I know basically what the amount is, anyway. It’s not 100% accurate, but it’s pretty close.

Lisa January 12, 2009 at 12:37 pm

I have an older version of Quicken (2006? maybe?) that I use to track my spending and savings. I download my account info from my banks right into it. I almost always use my debit card for purchases, so spending is easy to track and categorize.

I know that I wouldn’t have the discipline to enter in all those items by hand. I like the scheduling features that let me program a recurring income or expense item and then forget about it.

fern January 12, 2009 at 12:46 pm

I’ve been tracking my expenses for probably 15 years, but i guess i use one of the most anti-tech tools around, my own custom-made charts.

One is a word document on which i track daily and ongoing expenses as i incur them. The expense sheet lists the same expense categories each month, so i keep the template on the computer and print out a new one and just add the name of the new month.

At the end of the month, i transfer my monthly expenses, along with my income, in a larger spreadsheet. It’s not Excel, just a simple table i created using word. On it i collect all income and expenses for each month and then i tally everything easily for a look at the entire year, when that time comes. Works for me.

Thankful January 12, 2009 at 1:06 pm

I’ve been manually entering transactions into Quicken since 1999. At some point around 2000 – 2002, I started downloading transactions, but one incident where all my transactions for a multimonth period downloaded three times, and I had to go back and manually delete a big chunk of transactions scared me off. I also break down spending into pretty specific categories, so I’d have to do that manually as well. I feel like I really benefit from the attention forced by doing it manually when it comes to understanding our spending, which you mention above.

mrsmicah January 12, 2009 at 1:12 pm

@Amanda, that’s a real concern if you have an automatic one. As long as you see the overall figures and know you have enough money, it can be tempting to put off looking at the details.

@LittleMissMoneybags, it’s so cool that you and your boyfriend both do this. Before we married, Micah didn’t have bad financial habits, but I’m still the one who’s more interested in handling our finances.

@Saver, I sometimes run into that problem with Quicken, or it’ll give me funny charts if I transfer large sums of money from one account to another…I have to delete the entries to make it stop.

@Christine, sometimes almost accurate is good enough. As long as the margin of error doesn’t cross over your income for the month. 😉

@fern, I’m very impressed! 15 years of consistent money tracking is an achievement (and a habit) more of us should aspire to.

@Thankful, yes, the categorizing can get pretty tedious when you’re doing it by hand. Almost feels like it’d be better just to do the whole thing manually.

jodie January 12, 2009 at 1:40 pm

i’ve tracked my expenses manually since day one (over 10 years ago now…dude, i am old). i use ms money and enter everything on my own. i also use a spreadsheet for more general budgeting, charts, savings goals, etc.

i can’t imagine auto-downloading all my transactions into the software. i don’t trust the banks/stores/etc. to get everything right 100% of the time…need some checks and balances there! as others have said, it also keeps me much more in tune with our current financial situation.

maintaining this system isn’t hard at all. i enter receipts and pay bills once a week. in between those times, all receipts and bills go in a small magnetic pocket/folder thing i have hanging on the fridge, so everything is all together and ready for me when the time comes. it works great!

Andrea January 12, 2009 at 2:11 pm

I manually keep track of everything twice (sorta): once in an old Quicken program, which keeps track of ALL of my accounts, and I also have the free downloaded Pear Budget spreadsheet which I keep track of any and all purchases for the month. So a lot of my transactions are recorded in both places, but there are unique features to each program that I like, and I’m not ready to go down to just a single system yet.

Then the boyfriend and I also have a joint system where we put a certain amount of cash in categorized jars at the beginning of the month for our shared expenses (like groceries, and entertainment) and keep track of what is spent where/how much is left in each jar manually with an iPhone application specifically made for budgeting.

It might take a bit of time to keep track of all these things, but I find it enjoyable and comforting to always know exactly how much I have and where, and I wouldn’t feel comfortable any other way.

Fit Wallet January 12, 2009 at 3:53 pm

I agree that it’s important to manually track expenses at least once. I learned SO much about our habits, plus I could pinpoint areas where we saved money and snowflake that amount to our debt or savings. We tracked everything for three months before the novelty wore off and it started to feel overwhelming and even punitive. It became something I dreaded, rather than something I enjoyed. We’ve reigned in our spending, but the problem now is that we don’t know when we’re going over budget on say, groceries. I’d like to implement a cash envelope system for that stuff and am trying to convince my partner it’s a good idea. The only catch is we live in a big city and both commute by bike/foot, so carrying a big wad of cash around doesn’t feel so safe.

Dawn January 12, 2009 at 4:07 pm

I use a manual spreadsheet to track monthly spending but an automatic program (Mint) to get an overall view. I like my manual spreadsheet better, but there are some nice charts that Mint does that I like.

SimplyForties January 12, 2009 at 4:56 pm

I do mine manually with an Excel spreadsheet, which I created and I love.

Penelope Pince January 12, 2009 at 7:18 pm

My method of tracking our finances is really simple – perhaps too simple:

I log into my online banking a couple of times a week to make sure all is well.

Because I use a credit card to pay everything including bills, I check my online credit card statement a couple of times a month to make sure there are no unauthorized charges.

Come tax time, I do all my calculations on a spreadsheet.

Because we pay for everything by credit card, there’s just one credit card payment a month to remember and I have most of my bills on auto-pay with the credit card.

We don’t spend much, so there isn’t much to track. Grocery shopping once every 2-3 weeks, maybe the drug store once a month, and maybe 1 or 2 online purchases a month, and we buy gas 2-3 a year so that’s about it.

Travis January 13, 2009 at 3:31 pm

I use but I have to enter in all my transactions manually because I use a local bank that is not connected to Mvelopes. It can be trying at times because we do lose receipts and we have to go back and do adjustments. But overall I like seeing what I spend on everything. It really opened my eyes to how much money we were throwing away on eating on or new clothes, etc.

Canadian January 14, 2009 at 11:15 am

I think I must win the prize for the most low tech. I track my spending on paper! I have a binder with loose leaf paper. At the beginning of the month I write the category headings (e.g. Groceries) at the top of separate pieces of paper (or some share the same page, and I leave space for the details), and as I spend money throughout the month I write the details down under the appropriate heading. At the end of the month I add up all the categories and put the totals on a monthly summary page.

Frugal Trenches January 14, 2009 at 3:10 pm

I’ll admit I keep track manually with the help of online banking!

deepali January 14, 2009 at 3:18 pm

I’m a manual tracker with a spreadsheet program. My document has multiple worksheets – one for each month, which is further broken into weeks, and every single expense is marked on there (only takes a few minutes each night). One that tracks over months, by category (which is determined by what is entered in the monthly sheets). One that tracks my bank account out to the end of the year (verified almost daily online, and the same for savings accounts). And a few random others for tracking other things (and making charts and graphs and other geeked out fun). Been doing this since fall of 2006. It’s like tracking food – when you have to do it manually, you’re less likely to spend/eat frivolously. I pared down my expenses so much that I paid off debt super fast.
The only thing that isn’t tracked singly (and only tracked in my bank account if it is deposited) is random money I receive. By not including it in monthly expenditures, it still looks like I only have X to spend, freeing up more extra month at the end of the month to go into savings.

cybele January 14, 2009 at 6:27 pm

My old boyfriend and I used a very unsophisticated system – a refrigerator list, which was a longish sheet of paper with a line down the middle. When I bought something for our joint economy, I wrote it down on my side of the list, and he did the same. For the first 6-9 months, we actually added everything up on our respective sides of the list and settled up. Then we realized that because of our buying patterns, we were always within about $5 – 7 in our respective totals. After actually exchanging money a couple of times, we realized it was so close and so balanced that we stopped. I’m not sure it saved us money, but it sure saved us aggravation. If we’d changed our habits or spending patterns for our joint purchases it would have been different of course, but for us it worked. The nice thing was that it moved us to another level of trust and eliminated a potential source of conflict, which might have been detrimental if we’d started suspecting that “he/she isn’t paying his/her share.”

I used the same technique, much later, in business and found much the same result. ..

Lorta January 15, 2009 at 8:29 pm

There is a report at about Mint checking people’s accounts for fraudulent charges associated with a recent scam and notifying them if any were found. I can imagine users having mixed reactions to Mint searching through their charges, albeit for a worthwhile purpose.

My husband has created Excel sheets to keep track of our finances. He likes to do that kind of thing and is always coming up with new enhancements. I think he now has them linked to google or yahoo so that he can import the latest mutual fund prices every evening.

TStrump January 16, 2009 at 12:30 am

I use a combination of Money and Excel.
I use Excel to do a 24-month cash budget which gives me a rough idea of where I’m going to be.
I use Money to keep track of the day-to-day-transactions.

Mrs. Accountability January 17, 2009 at 1:07 am

I use Quicken, and Excel holds my budget, with the list of all the bills that are due to be paid that payday. I wouldn’t be happy with one or the other. I also use to keep track of credit cards, and make sure the ones at zero stay there. We have a lot of checking and savings accounts for me to track so I couldn’t do it without Quicken.

Rob Lewis January 19, 2009 at 5:55 pm

It took me a few attempts before I had the discipline to keep track of all of my spending, but I now manage to keep track of my spending by adding every transaction to Expensr ( I reckon I get about 95% accuracy with that, and I’ve managed to keep at it for a few months now. It has been a real eye-opener since I’ve been able to see where all my money is going.

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