The Discretionary Dollar

Do you wonder where your hard earned dollars get spent? Here are some ways to track your expenses in just a few minutes per week.

1. Use Online banking

Some smaller banks are still catching up but the larger banks have done a great job of giving you all the tools you need online. If you aren’t using online banking then tracking your expenses will be much more difficult and may require far too much time and effort.


2. Use Plastic Exclusively (or as often as you can)

Using your checkcard/credit card is the easiest way to make your purchases trackable. Everytime you pull money out of an ATM or you use cash to purchase something, you lose the ablity to track and account for that money or item. The same generally goes for checks also. There are other ways to keep track of your expenditures but none of them rival plastic. By using plastic you set yourself up for automatic tracking of expenses. Plus there are other benefits of using plastic.

3. Use an Online Account Aggregator

Now that you have all your transactions trackable via online banking, you are ready to process and categorize them. Find a service that will use your online banking credentials to process and cateogorize your transactions automatically. Here are a few:

• Mint.com (Personal Favorite) | Free. Custom Budgeting for all accounts including investment, brokerage and mortgage. Also has Cyberhomes.com integration for real estate valuation. It will give you a pretty accurate net worth in addition to very flexible and easy to use budgeting tools.
• Wells Fargo Spending Report | Free (with certain Wells Fargo accounts). No Hassle Budgeting and Categorization of expenses. Only limited to Wells Fargo accounts, and has no custom bugeting feature. From a trusted source, no other party has your login credentials.
• MoneyStrands.com | Free. Claims to have similar features to Mint.com. I have not used this but it appears to have some neat features.

4. Classify and Demystify

The above sites may not perfectly classify your spending types and accounts. The first few months it may be nesscary to audit your budgeting tools just to make sure Mint.com didn’t classify a few transactions incorrectly. For example your Safeway Gas purchase may default to the groceries category. Make sure to set it up so that future transactions are classified correctly so you won’t have to manually correct any classification more than once.

Mint.com will suggest a few budgets automatically but you will most likly want to tweak them to fit your needs. Check back weekly or as often as you need. You can even setup alerts that warn you as you get close to your budget. You now have a fully automatic way of tracking nearly every expense and income source.

Talking Point: What is your favorite feature of your online bank or budgeting tools?

This entry was posted on Friday, December 18th, 2009 at 9:46 PM and is filed under Banking, Frugal Living, Saving, Simplification, Spending. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.