Suzie Key Tima

I am not a financial advisor and this is not financial advice.

Tracking my spending is something I recently started doing. I started my current job about a year ago after graduating college and I immediately established an emergency fund, my retirement saving rate, and my investment goals. I grew my investment account to 10k in the past two years and I intend to triple it by the end of next year.
As I planned my goals for this year, I decided I needed to be more intentional about spending money while my necessary expenses were low. So, I started tracking. I’ll show you how I established a system to make tracking easier.

Figure out a baseline

I had to figure out what I was currently spending money on. There are two ways to do this. You can track your spending over the course of the next month by keeping a record of every penny that leaves your bank accounts and/or your pocket. The second way—which is what I used—is to go over all the activities from all your bank accounts and pull your records that way. I should note that this works only if most/all of your spending is done with cards. Some things to keep in mind in this step:

• Be sure to include all your accounts
  I’ve been using NerdWallet as the all-in-one place to see my net worth by linking of my accounts.
• Cash counts
  Don’t disregard the food you bought at CFA simply because you used cash. It adds up.
• Don’t forget the subscriptions.

Figure out what is necessary and what is recurring

As I looked over my list, I realized that some of my expenses were necessary and would be around the whole year; I made note of them.

Here is a list of some my expenses and the categories they belong to:

• Tithing
• Gas/General
• Gym membership/Fitness
• Jiu Jutsu/Fitness
• Supplements/Fitness
• Phi Kappa Phi Membership/Work
• Hospital Bills/Medical

Some of these occur once a month, some less than once a month, and some more than once a month. Some of these were the same every time like my tithe while some varied every month like how much I spent on social activities.
I am fortunate enough to live with my parents and lots of common expenses are not my responsibility. Some examples that might apply to other people are rent, utilities, car payments, phone payments, internet payments, insurance, groceries, etc.

You want to add up all your monthly expenses and an average for those that fluctuate.

Determine how much you can save realistically

This step is very important. Take your monthly after-tax salary and remove the 401k and other contributions that are made automatically. Subtract your necessary expenses and a reasonable buffer. That is approximately what you want to save every month. I like to save an even number like 1500 instead of 1497 or 1504. And I transfer that money into a Savings account. I also invest parts of my Savings.

Stick to your plan

I created an excel spreadsheet where I track my spending and categorized them based on whether they were planned, emergencies, or done on a whim. At the end of the month, I evaluate whether I stuck to the budget and/or how much I strayed. I also get an idea of why I make impulse purchases and I try to plan ahead to avoid them in the future.

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