Tracking Your Spending

In this topic, we cover:

  • Why we suggest tracking each and every purchase for a week or two.
  • The "20 Hour Rule" of working during school for full-time students.
  • What to do if financial stress interferes with your school work.

If you agree that creating a monthly budget would be helpful, we suggest tracking each and every purchase for at least a week or two - ideally, for a full month.

Why track spending? A monthly budget is just a plan – your actual spending behavior may be completely different. So if you don’t track your spending, you won’t necessarily know where you got off track or how to fix it. We all make important financial decisions every day. Tracking spending helps you find spending habits that can have long-term consequences that you may not expect.

Over a month, there are countless ways to spend more than you planned, including spending on things that weren’t even included in your budget. Small expenses can add up in ways you wouldn’t expect, and tracking your spending is a great step in making the most of your spending plan.

There’s no doubt that tracking your spending does take work, and it’s easy to feel like you just don’t have the time. But tracking spending is one of the best ways to stay on track and to avoid lasting credit card debt. Think of it this way – avoiding credit card debt by sticking to a spending plan means you automatically get a 15, 20, or even 30 percent discount on whatever you would have bought on a credit card and paid off over a year. That’s a great deal for anyone.

If you've created a budget using this website's Monthly Budget Calculator, your figures have been saved and are available for review at any time. You’ve already done some serious financial planning. Now it just needs a reality check in comparison with your actual spending.

Tracking Your Spending
The best way to get an accurate picture of your spending is to track it for at least one month.

Some spending is easy to track - rent or mortgage payments, car insurance, and utility bills are typically paid by check or bank draft, so there's always a record available. Other other hand, groceries, dinners out, coffee or vending machine snacks can be a lot harder to track, especially if you use cash. If you don't pay for absolutely everything with a credit or debit card, it's often easiest to keep each and every receipt. Then, at the end of the day or week, total all of your receipts and categorize each expense.

This website also offers a Budget Tracking tool that's a simple, effective way to track your spending. Once you have totals for each category in your budget, you can enter the figures in our Budget Tracking Tool for a comparison with your planned monthly budget figures. We'll also give you feedback on cash flow, luxury spending, and other factors as well. You can enter expenses at any time during the month or save it all for the end. Your results are saved on a monthly basis, making it easy to track your progress over time.

Other options for budget tracking include:

  • Paper and pen. Using your a checkbook register, debit or credit card transactions, and receipts, write down every expense.
  • Spreadsheet. Programs like Microsoft Excel can be simple and easy ways to track (and total) expenses. Many online banking services allow you to download your expenses into an Excel, tab-delimited, or comma-delimited spreadsheet - a great way to automate the entry of a good portion of your spending. Then you'd just need to enter cash expenses.
  • Online tools. Services like allow you to aggregate expenses across accounts into one place. To do so, you'll need to hand over your user names, passwords, and security challenge questions - something many people hesitate to do.

Dealing with Setbacks
One word of caution - while you will eventually want your income to exceed the amount of money you spend, that's not always possible for full-time college students. In fact, trying too hard to lower college debt is not necessarily a great idea, especially if it means working more than 20 hours per week at a part-time job. Studies have shown that working more than 20 hours per week is likely to cause academic performance to suffer. Full-time students who work around nine hours per week tend to have the best academic performance, even better than students who do not work at all.

Having some financial stress is normal for college students, but if finances interfere with your school work, or if you have to put necessary expenses on credit cards, you may want to consider speaking with someone in your school's aid office. Other financial options may be available to help you succeed both financially and academically.

If you're a part-time student with a full-time job, one strategy for dealing with financial setbacks is to set up an emergency fund – a savings account with cash set aside to cover the unexpected. Most experts suggest having three months (or more) of your salary in your emergency fund. If you don't have savings, most banks offer the ability to automatically divert a portion of your income into a savings account. Starting with as little as 5% of your paycheck into the fund is a great place to start.

A budget is not something most people can just make once and be done – there’s a process of trial and error until you find a budget that meets your spending goals. But remember, if you overspend one month, just make up for it by spending less over the following days or weeks – don’t give up. Sooner or later, you’ll find the perfect budget for your unique goals, challenges, and opportunities.