Budgeting gets all the attention, but Libby Kane, CFEI (and Executive Editor of Insider Personal Finance) believes the “best, most critical first step you can take to improve your finances is to track your spending.”
After all, you can’t make an accurate budget until you really know how much you’re truly spending on everything. But while keeping a budget is powerfully helpful, many people prefer to simply track their expenses.
This describes me. I only update my budget once or twice a year for planning purposes, but I relentlessly track my spending (and by extension, my household’s spending).
A couple of times a week, I open my Tiller-powered spreadsheet and scan all my transactions. I’ll manually categorize any expenses skipped by AutoCat, which helps me catch unusual charges. I’ll glance at my current bank balances, and sometimes I review a Spending Comparisons report.
This 5-minute ritual makes me feel confident and informed about my finances
This simple, 5-minute ritual has provided greater financial confidence than anything else I’ve ever done. (Increasing income is a close second – but that only goes so far when expenses from living, taxes, and fun are too high.)
I’ve eliminated vampire subscriptions, prioritized credit card payoff, and (somewhat) right-sized my grocery spending.
It’s also how I know when we can afford a random weekend getaway, a big dinner out, an unexpected donation, or a surprise gift for the kids.
What works best for you? Do you emphasize keeping a budget, or do you simply focus on tracking spending? Or are you somewhere in between?
Take a quick fun survey and share your thoughts here in the Tiller Community!