Thursday, 24 January 2013

Expense tracking

If regular expense tracking is a true sign of a personal finance geek, the Millionaire on Heels qualifies in spades. I’ve religiously tracked my day-to-day income and expenditure on a weekly basis for about 10 years, ever since I was saving for my first home deposit.

The process is pretty simple:
  • Choose a tool to track your income and expenditure
  • Choose the categories of income and expenditure you wish to track
  • Do it
Expense Tracking Tools

There are thousands of different tools out there.  You can use:
  • Personal accounting software – e.g., Quicken
  • Mobile apps
  • A spreadsheet
  • Pen and paper
Personally, I think accounting software is a bit of overkill unless you have quite complex financial affairs.  I’ve tried a few mobile apps, and I think they’re a good idea if you spend a lot on the go, have difficulty saving receipts, and are happy with a fairly limited range of spending categories and reports.  Some of them have pretty nifty features like the ability to scan invoices.  Personally, I’ve used a spreadsheet since before the days of apps, and I’m happy to stick with it for the meantime.