Budget Counseling - First Community Federal Credit Union

Track Spending to Reach Your Goals

You can't make progress on your budget goals until you know where your money is going. That means it's time to track spending.

Get a grip--Recruit the whole family to help keep track of all expenses for at least a week or two--longer if you can manage it. You'll see patterns and how routine mindless spending can mean death by a thousand cuts to your budget.

You may decide to use a small notebook and record each expense. Or you may prefer to use software such as Quicken or Microsoft® Money. It might work for you to collect all receipts and bills as you pay them. Whatever your choice, try to be consistent and pick a system you think you'll use and not abandon.

If that sounds too taxing, try this: Collect all your receipts for several days, then review each receipt. Put a plus sign or minus sign next to each expense--plus for on-budget, within your goals spending, and minus for off-budget, working against your goals spending. One red flag-: being unable to even recall making a purchase.

Get a goal--You also won't make much progress unless you're monitoring spending for a reason--weighing your expenses against a larger goal or goals.

Give whatever tracking exercise you use a rest for a month and then repeat it. Do you see improvements? Or have the leaks just shifted to other categories? Use credit union tools--direct deposit and automatic deposits into savings--to help you keep your eyes on the prize.