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A great way to track expenses

A good, old-fashioned spreadsheet isn't as sexy as some popular Web-based tools, but it's very effective in getting the job done.

By MSN Money Partner Aug 17, 2012 10:19AM

This post comes from Len Penzo at partner blog Len Penzo dot Com.


Len Penzo dot Com on MSN MoneyI've been diligently managing my personal finances and tracking household expenses for more than 20 years.


Image: Couple looking at computer (© Corbis)How diligent, you ask?


Well, I can tell you that my cable bill in February 1998 was $8.03, and that I spent $141.16 in 2006 for an annual subscription to the Los Angeles Times. I can also verify with certainty that 7% of my income in 2007 went toward groceries, and I can vouch that I spent $88.95 at my local Kmart in August 2001. Just don't ask me what I bought there, because I'm not that thorough with my record-keeping.


Why tracking expenses is important

Taking the time to track and analyze your income and where it's going is a crucial element of managing your personal finances. That's because doing so uncovers hidden money leaks so you can better allocate your resources, thereby ensuring you always get the most out your paycheck. It makes it easier to set financial goals, too.


Of course, if you want to track your expenses, you have to record them somewhere.


While it's not impossible, trying to track all your cash purchases can be extremely tedious and time-consuming. On the other hand, everything purchased on your credit and debit cards is automatically recorded and available for review online or as part of your monthly billing statements -- which is why I use credit cards for as much as I possibly can. (Post continues below video.)

As for keeping tabs on how you spend your money, a panoply of options is available. I realize that many people are initially attracted to sites like, OneBudget, Adaptu, and MyBudget-Online because their automation features essentially make the job of tracking your money almost effortless. The trouble is, in the world of personal finance I believe too much automation can be a curse. That's because when money management tools become too user-friendly, a lot of folks have very little incentive to understand the data being made available to them.


For the financially undisciplined, over time that's a surefire recipe for failure.


The big advantage of spreadsheets

For me, the more old-school, hands-on approach is the only way to go: I use my own custom-designed Excel spreadsheet because it forces me to actively manage my personal finances. It also gives me more control than I'd have using a Web-based site like Mint.


In fact, every January I give my readers a peek at some of that spreadsheet's top-level graphs and financial breakdowns in my annual State of the Household post.


True, a spreadsheet is not as sexy as automated money-tracking, Web-based applications, but it's the same tried-and-true method I've been successfully using to track my income, net worth and expenses for more than 15 years.


Although the custom Excel spreadsheet I developed was quite simple in the beginning, it has grown in detail and complexity over the years, with pie charts and graphs that clearly show the results of our household spending and current trending patterns.

Today, my spreadsheet breaks out our household expenses into 13 major categories and 50 subcategories. The major categories include:

  • Loans
  • Utilities
  • Medical and dental
  • Automobile expenses
  • Groceries
  • House expenses (excluding the mortgage)
  • Entertainment
  • Taxes
  • ATM withdrawals

And a few more quick tips

  • If you're just starting out, it's important to make sure you set aside about an hour or so at least once a month for reviewing your checkbook, receipts, and/or credit card statements and recording those expenses on your spreadsheet.
  • By frequently updating your financial spreadsheet, you'll not only be able to quickly catch any potential errors on your billing statements, but you'll also keep from falling hopelessly behind on your record-keeping duties.
  • If you're not an expert in Excel, there's no need for despair. Microsoft has scores of budgeting worksheet templates for you to download and modify to suit your needs. In fact, its "personal budget worksheet" template has been downloaded more than 3.6 million times. (MIcrosoft is the publisher of MSN Money.)
  • If you've never used a spreadsheet, don't be intimidated. They're not hard to use. Yes, spreadsheets are extremely powerful tools for those who know how to take advantage of all they have to offer. But for most folks, the basics needed to properly track expenses can be learned in less than 30 minutes.
  • If you don't want to spend money on a spreadsheet such as Microsoft Excel, you can try the free equivalent from OpenOffice. I've used OpenOffice before, and it's an extremely capable alternative. You can also take advantage of the free personal finance templates provided by Google Docs.
  • Once you've effectively disciplined yourself to always spend less than you earn, tracking expenses becomes a viable alternative to budgeting that allows you to focus on optimizing your finances in order to get the most bang for your buck.
  • And last but not least, remember this: In the end, it doesn't really matter what tool you use. What is important is your commitment to actively manage your finances.

More from Len Penzo dot Com and MSN Money:


Aug 19, 2012 11:16AM

I use microsoft money as my check register.  Download every few days from bank account to keep up to date.  But, I do not spend cash unless I have to.  I have no checks and very rarely use the debit card.  My bills are all listed so I can put them in for as far ahead as I want...generally 30-45 days out.  Since I am on salary there is no uncertainty about how much my paycheck will be.  I am able to plan out how much of the highest interest debt I will pay off well in advance.  My last credit card debt will be paid off this month.  I use one credit card for everything as it pays me 2% cash back...but I make sure to keep the card paid off so I am not charged interest on it. 

   I did create a one page spreadsheet for tracking that all bills are paid.  Color coded to indicate whether it has been paid or even better nothing was owed.  Yellow indicates paid and green for nothing owed in a given month. 

   Actually only pay 4 of all the bills directly from the checking account (that I have no checks  All others are paid with the one credit card that pays me for using it.  While I do not bother with tracking expenses, what I do take seriously is how much it will cost me to use someone else's' money (whether in the form of a loan or credit card debt).  Not whether I can afford the payments...but the actual cost.  Just spent $339.00 yesterday.  Used a card I have not used in years with a company I do not like (you guessed Sears?).  Will pay Sears $0.00 for the pleasure of using their card to pay for an item I needed.  The secret is in ENSURING that it is paid off in the 12 months.  The last card I carried a balance on that charged interest was 7.24 %. 

   Even reviewed our mortgage to find we could save $42,000.00 (over the life of the loan) by eliminating the PMI and modify the note from 30 years to 15 years.  There is negligible savings beyond lowering a mortgage to 15 years...but do the math and then what is right for you.

   While Len's last sentence is dead on right...I would modify the point made before it. 

Make sure you understand the cost of everything you do...Borrowing money can be done wisely only when you are very aware of what the cost will be.  When using 0% offers for instance watch out for this phrase: "if paid in the 12 month period..."  I currently have 3 balances at 0% and have ensured that they will be paid off before interest is charged on any of them.

   Oh, 1 hour a month?   LMAO ... I obsess with tracking, paying bills, checking accounts for activity and the like.  Probably spend an hour every few days making sure everything is right and on track. 

Mar 27, 2014 5:59AM
I'' recommande using keepek android app :  

Just snap pictures of your receipts, the app extracts then key information such as merchant name, amount and date. You can easily manage categories and enter manual expenses as well as mileages. You can also report expenses to get approved or shared.

The app is free and is coupled with a website providing other services such as invoicing :
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