How to Track Your Spending

Ready to start this year with a fresh financial start? Of course you are! ’Tis the season to review, refresh and improve what you can. 

Why not start with your money, and specifically, track your spending during the new year? It can offer a host of benefits. Here’s how to do it.

Why Track Your Spending? 

When you track your spending, you’ll uncover more benefits than just knowing how much money you have during any given period. Here they are!

Reason 1: You know what’s going on with your money.

How easy is it to put on your blinders and ignore what’s going on with your money?

Pretty easy. It’s habitual to pay bills, spend money, go on with your normal expenditures and more and not think too much about what’s in your account. (As long as you’ve got a little bit in your checking account at the end of the month, you shrug and move on.) 

It’s easy to fall into this trap. But do you know exactly how much you’re spending on groceries per month? How much are you spending on takeout? It’s easy to let your money govern itself, but it doesn’t have to be that way. You want to stay in charge of your money — not the other way around.

Reason 2: Tracking your expenditures helps you if you’re in debt. 

Tracking your expenditures helps you learn why you’re in debt and how you got there. Structuring your expenditures and understanding where your money goes can help you learn strategies for how to get out of debt.

Reason 3: You can track down spending issues. 

Maybe you’re not in a pile of debt. Maybe you’re not living paycheck to paycheck. But you might spend a lot of money in one area and not even know it. For example, you might learn from tracking your expenses that you pay monthly for a service you don’t use (such as a gym membership, for example). You could cancel these services or switch to a cheaper option. You might also realize your addiction to tennis shoes is causing you to run out of money 10 months out of 12.

Reason 4: It’s the first step toward taking control of your money. 

Maybe you’re ready to admit you don’t have any idea what’s going on with your money. That’s a great first step! When you do that, you can take steps to correct it. 

Make an effort to record every financial transaction you make. That way, you’ll know exactly how much money sits in your bank account and how much you can spend. In the long run, you take complete control over your finances.

How to Track Your Spending 

What’s the best way to track your spending? Luckily, in this day and age, there’s almost a limitless number of ways you can do it.

Step 1: Build your own paper or digital spreadsheet. 

Don’t need a fancy app? Input everything you make minus everything you owe into your own spreadsheet. A major upside to using your own spreadsheet is that it’s customized to fit your needs. The downside is that you may not be able to see everything that comes and goes out of your budget in real time and you may have to keep up on it daily, if not hourly!

You can also stick to a paper budget instead of an Excel spreadsheet if you want to go the old school method. 

It’s also difficult to keep track of paper to record your purchases, like receipts from the gas station or a few debit card purchases. In addition, unless you choose a binder or notebook that’s fire engine red or stays on your coffee table 24/7, you may lose that, too.

The other downside to using a spreadsheet to work through budgeting is that your spouse or partner might not love the idea of entering every dollar into a tablet or Google spreadsheet. You both have to become hyper committed to putting the dollars on here so they make sense.

Step 2: You can also opt for a budgeting app.

You can create a budget in minutes using a budget app. You’ll see exactly where your hits and misses are in seconds. Log in to your phone and see when and where you spend money, seconds after you make a purchase. 

Budgeting apps are one of the most popular ways to track spending, save and learn how to allocate money to those important things in life.

Step 3: Craft a budget.

You won’t be able to track your expenses without a careful monthly money plan. 

A budget helps you put your money in its place. Does it sound like a real drag to set up? Would it help if it came down to writing down three steps? (Because that’s really all it is!)

  1. Write down your monthly income — from all income areas, including alimony, child support, freelance work and more.
  2. Write out your monthly expenses, and don’t forget to include: 
  • Food
  • Shelter (mortgage or rent and utilities)
  • Clothing
  • Transportation
  • Entertainment
  • Giving
  • Saving
  • Other expenses not listed above
  1. Check to see what your expenses minus your income show. If you’re in the red, you need to figure out a way to make your lifestyle fit your budget.

Step 4: Auto draft important things like retirement, mortgage and utilities.

You want to make sure you’re paying late on things like mortgage and your utilities because you’ll pay extra for those at the end of the month. Make them automatic by arranging with each company so they automatically come out of your account every month. 

Step 5: Start using cash more — skip the credit cards.

When you know you need to curb your spending, there’s no better time to get to know your cash again. When you can see your cash flying out of your wallet, it hurts, doesn’t it? When you can feel your money, touch it and see it, you’re much less likely to want to spend it. There’s something very visible about paying for expensive things in cash and mentally totaling up how hard you had to work for that amount of money. 

You could even go so far as to cut up your credit cards and rely solely on cash!

What You Can Do Next 

Now what?

Step 6: Take consistent action.

Simple, right? That’s it. All this reading means nothing if you don’t actually take action on one of these very successful tracking methods — and implement a budget. Don’t get stuck on choosing a tracking method. Choose one and implement it. If you don’t like it, you can always change the method later. Don’t let indecision paralyze you! 

Step 7: Create an emergency fund.

So, what does and emergency fund have to do with tracking spending? Great question. Once you’ve got all systems in order and everything is working seamlessly, you want to create an emergency fund. 

Emergency funds offer a cushion if a major expense shows up and you need a refrigerator or new car or new roof (yikes!) as soon as possible! You want to aim for a $1,000 emergency fund right off the bat, then save for three to six months’ worth of expenses. This larger amount can help cover you if something else happens, such as a job loss or if you encounter a major health issue.

Step 8: Get help if you need it.

Have you ever gotten a financial advisor to help you with your finances? Just like you’d never entrust someone without a medical degree to your health, why would you trust someone who’s not certified (including possibly yourself!) with your money?

Meet with a financial planner (the first consultation is always free!) and he or she can help you with your overall financial picture and give you tips on how to track your spending. 

Step 9: Save for the important people in your life. 

Once you’ve tracked spending, created an emergency fund and know you’re contributing enough toward your retirement plan, make sure you’re allocating money to UNest for college savings.

In less than five minutes, you can open a UNest investment account and save for your child’s college education — or a nephew, grandchild’s or friend’s child. You can find the right investment options tailored exactly to that child’s age. Opening an account costs just $25 per month. 

You’ll be trying to figure out your child’s tuition payment plan before you know it, so get on board with UNest. In addition, you can also get rewards when you buy from brands you love!

Track Spending for Maximum Financial Fitness

It’s the time of the year when we all make lots of resolutions. Just make sure you actually act on your resolutions and don’t skip the important actions you need to take or the important conversations you need to have, such as with a financial advisor. 

Happy New Year from all of us at UNest!

Ksenia Yudina, CFA, MBA

Founder and CEO

Ksenia is the Founder and CEO of U-Nest, the first mobile app that makes it easy for families to save for college. As an entrepreneur and finance professional, Ksenia has focused on alleviating the impact of student debt on families across the economic spectrum. Previously, Ksenia was a Vice President atCapital Group/American Funds, the largest 529 provider in the U.S. In this role, she played a leadership role in helping parents plan and manage their finances, with a focus on the future well-being of their children. Prior to Capital Group/American Funds, she was founder of a residential real estate company. Ksenia earned her bachelor’s degree in finance from CaliforniaState University Northridge, and an MBA from UCLA’s Anderson School of Management.

Mike Van Kempen

Chief Operating Officer

Mike joined U-Nest in September 2019 as COO. He was previously at Acorns, a financial wellness platform, where he spearheaded the analytics and growth initiatives. Mike successfully expandedAcorns’ paid acquisition strategy, adding over 4.5 million investment accounts. Mike began his career in strategy & analytics at Belly, a Chicago-based loyalty startup in 2012. At Belly, Mike led projects that fueled growth across all aspects of the business, growing the customer base from1,000 to over 11,000 merchants, and accumulating a membership of over 2 million customers.Mike holds a B.B.A. in Finance from Loyola University of Chicago.

Steve Buchanan

Chief Technology Officer

Steve has over 20 years of experience in delivering digital innovations in the financial sector. Steve previously orchestrated product architecture and innovation as a Solutions Architect/ Fintech consultant at Union Bank. Prior to Union Bank, he was Chief Architect and Director of Engineering at Calypso, a Silicon Valley startup, where he architected and built multiple financial solutions. He was also Head of Global Integrations at Globe One in Vietnam where he integrated its Peer-to-Peer lending products into core banking solutions. Steve also built the first ever electronic Equities &Equity Options trading systems for Scottish stock brokers Wood Mackenzie (acquired by CountyNatWest). He is a graduate of Edinburgh University.

Peter Mansfield

Chief Marketing Officer

Peter has built an impressive track record in multiple financial industry segments including payments, credit/prepaid cards and lending. He has played an instrumental role at a succession of financial industry leaders, co-founding companies such as Brand3 (acquired by American Express) and PropertyBridge (acquired by Moneygram), and, as the early stage marketing lead at Marqeta (where he was team member number two), BillFloat and WallabyFinancial (acquired by Bankrate).He has helped fast-growth companies reach an aggregate market value of close to $8 billion. Peter holds a bachelor’s degree in economics from the University of Angila, UK.

Sonya Kidman

Client Relationship Manager

Sonya Kidman is a Customer Success professional with a decade of experience in advocating for consumer through user research and genuine empathy. Sonya specializes in user behavior and regularly attends national and global training sessions in wellness and people analytics tools. Sonya is a true global citizen was born in Russia, grew up in Israel, lived and worked in Canada and NewZealand. That global expertise along with an undergraduate degree in Sociology from Tel AvivUniversity have helped to shape a bullet-prof Sonya's framework to develop a winning customer strategy.

Frank Mastrangelo

Board Member

One part banker and one part technologist, Frank spent his early days with the Annenberg Foundation and PNC Bank. His career path led him to Jefferson Bank, where he led the build-out of its electronic banking platforms, and where he would forge a powerful alliance with The Bancorp co-founder Betsy Z. Cohen. As President and COO of The Bancorp from its inception in 1999 Frank played a critical role in helping the organization become an industry bellwether for branchless financial services and a global leader in payments. For this, he has become a widely respected fintech expert, and thought-leader. Frank was recognized in 2013 by Banking Innovation, a leading industry journal, as an “Innovator to Watch.” and as one of the innovators shaping the future of banking. Frank is a graduate of West Chester University of Pennsylvania.

Disclosure

College Savings Calculator is a hypothetical tool that demonstrates how monthly contributions, age-based asset rebalancing, and tax savings may impact the long-term value of your account, and do not take into account a portfolio’s underlying investment management fees. Calculations assume the private institution cost inflation is 2.8%, public out of state cost inflation is 3.9%, public in state cost inflation is 2.7%. Portfolio is assumed to have only stocks and bonds. Monthly equity returns are based on the historical data from the 10-year track record of the stock market (SPY). Monthly fixed income returns are based on the historical data from the 10-year track record of the bond market index (AGG). The current college expenses are provided by the collegeboard.org. Actual account performance may differ due to market fluctuations, changes in recurring investments, and asset allocation. The information provided here is for illustrative purposes only and does not represent actual or future performance of any investment option and is not intended to predict or project the investment performance of any security or index.