Struggling With Expense Tracking? Here Are 8 Tips For You!

When I started working in my first full-time job, I thought that it would be easy to save money

After all, my take home pay was 5-6 times greater than my university allowance.

Yet after 6 months, I realised the amount in my bank account had barely increased. And this was even after I had a pro-rated 13th month bonus!

Where did all that money I earned go to?!

This burning question led me to the world of expense tracking and budgeting. Since then, I have been tracking my expenses for the past 4 years and counting. 

In this article, I will share 8 tips that I hope will help you manage your expenses better.  

It’s easier to start than you think

Trust me, starting is easy. Sustaining this new habit that you have decided to pick up is much harder

There are many tools you can use to manage your expenses, but generally there are 2 main approaches:

High-Level

You’ll track your overall outflow of money on a weekly/monthly basis. 

This budget includes both:

  1. Recurring payments
  2. Day-to-day expenses
ProsCons
Works best if you have at most, 3 preferred payment methods and/or only 1 debiting accountYou get minimal insight into your actual spending patterns, unless you use a card to pay most of your bills 
(iBanking apps that help you categorise your spending automatically can be helpful here)
Quick to implement and relatively low-effort
Does not require a dedicated expense tracking app 

Detailed

You can track every expense, categorise them and set budgets for each category.

AdvantageDisadvantage
A great option if you want full control over your budgeting. You can set individual budgets for different categoriesRequires a lot of discipline and effort at the start.
However, once you build up the habit of doing this, it gets easier and because almost like muscle memory! 

To carry out this approach, I would recommend you to use an expense tracking app on your phone.

You can check out which app I use here!

Set a goal for yourself that you really, really want to achieve

I can’t stress enough that discipline is really key to managing your expenses well. 

Here are some ways to sustain your habits:

  1. Set recurring reminders
  2. Place your expense tracking app on the first page of your mobile screen 
  3. Ask someone to be your accountability partner

To really succeed at building this habit, I believe that it is more important to set a goal and work towards that. 

This goal should be achievable, and you can do so by:

  1. Tracking your expenses regularly
  2. Sticking to the budgets you have set

I decided to adopt a 2-component approach to saving, where I’d save either:

  1. $1,000 per month (Minimum)
  2. $15,000 at the end of a year (“Stretch”)

If I saved the minimum of $1,000 a month, I would only have $12,000 at the end of 12 months. 

The “stretch” component then pushes me to save more than the monthly minimum. 

This helps me to aim higher, and eventually I’ll end up with more savings

This method of goal setting also allows for any unexpected, large payments, such as:

  1. Angbao for a friend’s wedding
  2. Large medical expenses
  3. Repair / replacement costs for a device you use regularly

If you can’t hit your stretch goal, at least you can feel good about achieving the minimum goal

Don’t forget your recurring expenses!

Recurring expenses can include:

  1. Phone bills
  2. Card bills
  3. Insurance payments
  4. Taxes

However, don’t forget to include lifestyle-related subscriptions as well! These will be subscriptions like Spotify, Netflix, and your iCloud storage plans.

I strongly encourage you to be wary of low-cost monthly fees

A $10 subscription may not seem like much. However, that’s a $120/year outflow of money which is pretty substantial!

Choose a tracking method that fits your current lifestyle 

By choosing a low-friction tracking method, you’ll be more successful in building up your expense tracking habit.

Ideally, it should not take more than a minute or two for you to record an expense or categorise your expenses, etc. 

The method you choose should be aligned with how much time and effort you’re willing to invest in expense tracking. 

For example, if you choose a high-level approach, you may want to consolidate your spending onto credit cards that automatically splits your spending into preset categories. 

If you choose to go with the detailed approach, look for a mobile app that is: 

  1. Easy to use
  2. Allows you to visualise your spending patterns using charts 

I use the Money Lover mobile app, and it is available for free on both iOS and Android. 

Source: Money Lover

The free version is more than enough to get you started and if you do decide to go for the paid version, it is a one-off purchase (no recurring costs, yay!). 

I upgraded to the paid version of the app after using it for a year as I wanted to customise my budget categories and support the people behind the app too!

Set practical and realistic budgets!

Budget setting is subjective and should be tailored to your spending habits. 

You can set budgets based on the: 

  1. Type of expenditure (eg. dining, shopping, transport)
  2. Occasion / intention of the expenditure (eg. separating out birthday gifts from the general shopping category, and weekly dates from the dining category)

Your budgets should also be flexible enough to accommodate unexpected purchases each month. 

I add flexibility to my budgeting with a Buffer/Others category. 

This allows me to record one-off or infrequent purchases like hair cuts and wedding ang baos. 

If you’re thinking of tracking your expenses, I reckon you’re thinking of reducing your expenses too. 

It may be tempting to set low budgets so that you can (hypothetically) save more. 

However, if the budgets are not realistic, you may struggle to keep within the budget. You may even feel stressed or unhappy!

With time, these feelings of dissatisfaction can build up. Eventually, it’ll erode your discipline to continue tracking your expenses. 

If you want to reduce your spending drastically, I’d suggest gradually reducing your budget over time.

I usually recommend my friends to track their expenses for at least a month. This allows them to get a sense of their own spending habits

They can then set budgets based on that data, and make adjustments along the way. 

Eventually, you’ll settle on a budget that you’re happy with and can achieve it consistently

Do I really want this?

I like shopping for clothes. 

I follow many popular blogshops and get constant updates when they have new launches. 

If there’s something I want to buy, I’ll set a reminder for the launch time so I can check out before the item goes out of stock.

At least, that was the person I used to be, before I started to be more conscious of my finances

These days, I still shop for clothes. 

However, I’ll always ask myself these two questions to prevent impulse buys

  1. Do I really want this? 
  2. What can I do with the money I save if I don’t buy this?

If I can answer both questions honestly, then I’ll go ahead and indulge myself while keeping to my budget. 

Budgeting is not abstinence but spending moderately and within your means. 

Look for cheaper substitutes that fulfil the same needs or wants

Sometimes, a cheaper alternative will help you fulfil the same needs/wants. 

For example, if you like eating dessert and have a habit of completing your meal with dessert, consider going to Chateraise for a $4 slice of cake (that tastes great too!). 

Source: Chateraise

You’d save a lot instead of ordering dessert from the place you’re eating at, which may set you back by $10 or more!

If you want to take this to the next level, pick up cooking as a hobby. You can start to cook some of your date night meals in-house, or prepare your weekday lunches! 

I cut down my date night spending from an average of $200/month to $80/month by suggesting cooking as a couple hobby 😉

Just do it!

If you always complain about not having enough money but do not take any action, you’ll definitely go nowhere!

Start small and be accountable to yourself

You’ll thank yourself tomorrow, for the effort you put in today. 

The feeling that you “got this” and knowing your own finances like the back of your hand is incredibly empowering

Happy expense tracking! 

Joce, the writer of “Financial Freedom by 40”, is a self-taught investor working towards her goal of achieving financial freedom in her forties.


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2 comments
  1. Kudos to Joce, with her expenses tracking habit cultivated, I dare say with high confidence, barring any lifestyle inflation (which she will keep in check with the help of the expenses tracking app), she will reach her goal of FI by her 40s.

  2. Hi,

    One suggestion to consider. You may want to record the daily expense in a spreadsheet on a daily basis. It may be helpful for your computation.

    WTK

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