Budgeting Basics: Tracking Your Monthly Expenses


If your goal this year is to be better about budgeting, your first step is to track ALL of your monthly expenses.  You have to know where you’re spending your money each month before you can decide how you want to spend it in future months.  If you have mainly been using a credit or debit card, this should be easy because you can simply look at your statements.

Budgeting Basics:  Tracking Your Monthly Expenses

1.  Track all of your monthly expenses – This means EVERYTHING including trips to Starbucks for your morning coffee or trips to the vending machine at work for your caffeine fix in the afternoons.  Sometimes this is very enlightening.  Maybe you had no idea you were spending $100 a month at Starbucks or $30 a month on the soda machine at work!

2.  Assign your purchases to general categories.  I have been budgeting for awhile and have gotten very specific about the categories that we use for budgeting because I like to know exactly where our money is being spent.  Some people prefer to use more general categories (for example, food would cover grocery purchases and eating out).

Here are the categories I use for budgeting:

  • Blow (my husband and I each get a set amount of money each month that we can spend on whatever we want, no questions asked)
  • Charity (monthly contributions to our church)
  • Child Care
  • Clothing
  • Debts (credit card payments)
  • Eating out
  • Entertainment (this includes our date night, Netflix, and a little extra for something fun for the family)
  • Gifts (this includes monthly gift purchases plus money for Christmas gifts)
  • Groceries
  • Housing (this includes our mortgage, homeowner’s insurance, alarm fees, and property taxes)
  • Kids Allowance
  • Kids School Expenses (this includes school lunch once a week and extra money for school supplies, school pictures, book orders, and any other school-related expenses that come up during a month)
  • Medical (this includes budgeting for monthly co-pays, my daughter’s orthodontics, prescriptions, and money for over the counter prescription purchases)
  • Miscellaneous (this includes household products like toilet paper, trash bags, and paper towels)
  • Pet Care (this includes our monthly payment for pet insurance as well as food and treats)
  • Recreation (this includes your YMCA membership and expenses for kids activities like swimming and basketball)
  • Savings
  • Toiletries (this includes health and beauty items such as makeup, toothpaste, deodorant, etc.)
  • Transportation (this includes our car payment, monthly gas expenses, car insurance, budgeting for oil changes, and budgeting for yearly registration and inspections)
  • Utilities (this includes cable, electricity, gas, water, and our cell phones)
  • Vacation

3.  Review your monthly allocations.  Where are you spending the most money?  Could you cut spending in one of those areas?  Maybe you didn’t realize how much you were spending on cable TV each month.  Could you go to a basic plan instead?  Could you cut down eating out to once a week?

This is the first post in my 30 Days to a Better Budget series!  I’ll be giving you ideas about how to start a cash only budget, how to cut your budget, and how to budget for specific situations.

Cut your Car Insurance Expenses!

A few months ago, my husband and I saw down and looked at ways that we could cut our monthly expenses. We called our cable company, phone company, and car and home insurance companies! By doing this, we were able to lower our monthly expenses by almost $700! Our car insurance expenses went down over $100 per month just by shopping around! If you haven’t shopped around lately, find out how much you can cut YOUR expenses by getting a quote from Esurance.

I just checked to see if we could get a lower rate and it took less than 5 minutes for everything! Click here to get YOUR quote–> Cut your car insurance expenses

How much money can YOU cut from your monthly expenses?

*This post may contain affiliate links. Please refer to my disclosure policy for more information

Building a Better Budget: Teaching Kids About Money

Since my husband and I have started taking Dave Ramsey’s Financial Peace University class, we’ve had some great conversations about money and our budget.  We’ve talked a lot about how to cut expenses and paying off debt, but we hadn’t talked a lot about how we can share the things we’re learning with our kids!  Thankfully, they covered that in our class last week!  Dave’s philosophy is that you don’t give your kids an “allowance”  Instead, you give them jobs to do each week, and those jobs are tied to “commissions.”  He talks about how it’s important to teach your kids that work is tied to money, which ties in with the commissions concept, rather than that money comes just because, which is the allowance concept.

We tried this for the first time last week.  We met on Sunday night and explained to our kids that they were going to have a checklist of jobs to do each week and that if they did their jobs, they would be “paid” for each job.  The list included things like making their beds, cleaning their rooms, and helping out with other household chores like picking up the family room and wiping down the kitchen table.  Payday was the following Sunday and the kids were so excited that they each earned $5 in commissions that week!

Then, came another lesson.  The lesson on saving, giving, and spending!  Being kids, their eyes lit up as soon as they were paid and my five year old eagerly began talking about all of the things he was going to buy with his money.  I don’t think he’s crazy about the whole “saving” concept yet, but we plan to take them to a local credit union to open their own savings accounts and hopefully, that will give them a better understanding.  I can still remember when my parents took me to open my first account when I was a kid and how excited I would get each time I got to go to the bank to deposit money!

How do you teach kids about money?  Do they earn money or do they get a weekly allowance?

Want to know more about our journey to save money?  Check out our Budgeting Basics post here and find out how we are going to be saving $4200 this year–>  Budgeting Basics:  Know where your money is going

*This post may contain affiliate links. Please refer to my disclosure policy for more information