Continuing the previous post, How I took control of my money, let’s see how easy it is to see where your money is going.
My long term idea is to write few articles with different topics but when you’ll put everything together, you’ll get a pretty nice money tracking and planning Excel file.
Again, for any specific needs, ideas, help, feel free to get in touch with me.
So, expense tracking. Very shortly, what it is and why it is needed?
Expense tracking allows you to record and categorize expenses. Ideally, it is used as part of a budget but, for those who never had a budget or never tracked their income and expenses, simply tracking these will help a lot.
To get into the habit of using it, a very simple spreadsheet is enough. Later on more things can be added to track other items as well, like categories and subcategories.
Why you need it?
- It will allow you to take control of you finances.
- it will show you your bad spending habits.
- It will allow you to see spending patters and eliminate them. Did you ever think about how much you’re paying monthly by buying one coffee every day? Let’s do some math quickly: 2$ coffee x 20 business days avg x 12 months, would be 480$. Almost 500$ a year for coffee only!
- It will help you save money.
- Last but not least important, improving your or your family’s financial life, will improve your life in general and the relationship with your partner.
While there are a lot of apps, online software and even pre-built Excel and Google Docs worksheets on the internet, if you need something really-really simple, consider the one below:

Important notes:
- To make this tracker
bullet-proofaccurate, at the end of each month you need to have the same amount in your account and in the spreadsheet. This is called “reconciling the ending balance in the spreadsheet with the actual account balance”. - To do this, you will need to have a line for the start of the month and another one for the end of the month.
- Starting balance is the money you have in your account at the beginning of each month. You add this amount under Income column as a positive number.
- Ending balance, similarly, is the money you have in your account at the end of the month. As you may have guessed already, these 2 are the same (you start the month with what you ended the previous month, no big logic here), with the exception of the date you start your spreadsheet. You add this amount also under Income column but, as a negative number.
Let’s see below how would 2 months of income and expenses look like.

Right, now that we know how it looks like, let’s see how balance is calculated.
The very first time you start the spreadsheet, Balance field is equal to Income.
Afterwards, every single line follows the same logic: the sum of previous balance (the row above) and Income, minus the expense amount.
Clicking Show Formulas in Excel, this is how Balance formula looks like:

Not so complicated, right? So using a spreadsheet like this will help you see where you’re spending your money. When you have few months of data you can start building some additional charts, pivot tables etc. to see this information in a nicer form. But we’ll reach it later, don’t worry about it now.
For now, get into the habit of adding the information to this file at least weekly, if you cannot do it daily.
Doing it daily, will take you less than 5 minutes. Doing it weekly or monthly, will take you hours to review your account and remember what was that for and the other one etc.
Why it is important to regularly track your expenses? You will quickly spot patterns of where you’re overspending.
To summarize, expense tracking is essential for budgeting and financial management a healthy financial lifestyle. It helps you understand where your money goes, identify bad spending habits, and take control of your financial decisions. Reconciling the ending balance in the spreadsheet with the actual account balance at the end of each month is necessary for accuracy (nobody likes reviewing receipts at the end of the month), and financial reporting later on. Regularly reviewing and analyzing tracked expenses helps you identify areas of overspending, improve the accuracy of each expense/vendor, identify errors and discrepancies.
Again, if you have any question, let me know.
The Excel file can be downloaded from here. No subscription needed, it is available to download freely 🙂 just right click on the link and select save as.
Next article would be about categorizing expenses or creating subcategories to track specific spending areas.
Featured image by Kenny Eliason on Unsplash.