Sadly, the typical American probably doesn’t have a very robust way that they track their finances.
However, I’ve been tracking my finances in one form or another since I was in college.
Here are the systems I’ve used to tracked my finances.
A Ledger Book
Ever since I was a kid, I remember seeing my mom track her finances in a black ledger book.
The idea was simple enough and allowed her to keep track of what she felt was important in her finances.
When I moved out and went to college, I figured I need to at least keep up with how much money I had.
My parents paid for all of my food, so I had to keep track of my food money separately from the money I earned myself. So, I decided to get one of the ledger books and keep track.
I’d write down whenever I received food money from my parents as well as all of the times I spent money on food. I’d keep a running tally of how much food money I had left on the side of the page.
This was super helpful because I could always let me parents know when I was running low on food money in advance so they could send some more before I ran out.
Unfortunately for my friends, they didn’t use a similar system and normally found out they ran out of food money when their bank account hit zero and it could be a lean week until food money reinforcements arrived from their parents.
An Excel Spreadsheet
At some point which I cannot remember, I switched from my ledger book to an Excel spreadsheet for tracking my finances. My best guess is it was after I took an Excel class in college, but the timing doesn’t really matter. What does matter is I had much more insight into my finances when I entered all of my spending in Excel.
Even though I didn’t know enough to make my financial tracking spreadsheet super powerful, the simple spreadsheet tools such as being able to find a certain transaction quickly or sort all transactions by vendor or type of expense saved me a ton of time.
On my spreadsheet I listed out the date, vendor, amount spent as well as the category the expense fell into. I again kept a running balance of how much money I had left available to me, as well.
Quicken – Manual Entry
One day at the end of my college years I came across a free Quicken CD. I figured that Quicken was probably a bit more robust than my basic Excel spreadsheet and was right. At that point I switched to Quicken and haven’t looked back.
The first few years I had Quicken my finances were pretty simple so I simply manually entered every single transaction and reconciled the accounts to their actual balances myself. As an accounting major, this was pretty easy for me.
By manually entering my transactions, I was very aware of where all of my money was going. The nice thing about Quicken was it came pre-loaded with all sorts of cool tools and reports. I didn’t have to try to manipulate the data in my spreadsheet to find the info I wanted. Instead, Quicken provided it for me.
Quicken – Automatic Entry
There came a point in time where I felt I had a pretty good handle on my finances and manually entering all of our transactions started to become a waste of time.
At that point in time, I set up Quicken to automatically download all of my transactions for me. I still check every transaction and make sure they are correctly classified, but automatic entry in Quicken has saved me a ton of time.
In fact, Quicken is one of the reasons why I’m able to keep track of our multiple credit cards and sign up bonus offers. This year is our busiest year yet for credit card sign up bonuses and there is no way I’d be able to keep up with everything without automatic transaction entry from Quicken.
If we ever feel like our finances are getting out of control, which we don’t right now, we’ll go back to simplifying our financial lives and start using manual entry mode again.
As long as we keep tabs on how much we’re spending in different categories based on Quicken’s reports on a regular basis, we should be in good shape.
Other Ways To Track Your Finances
If you don’t like any of the above methods to track your finances, there are plenty of other options out there. Many financial bloggers swear by tracking their finances on either Mint or Personal Capital.
Mint is essentially a free online version of Quicken which allows you to track and categorize your finances. Personal Capital offers some features to track your finances, although it is better suited for tracking your net worth and investments in my opinion, which is still super important.
Personally, I track my net worth on my net worth tracking spreadsheet since I only update it once a month. However, if you want to automate the whole process, I would definitely use Personal Capital. They even will give you a free consultation with a financial advisor if you link over $100,000 in investable assets.
As you can see, there are many different ways to track your finances. These were the ones I personally have used throughout my adult life, but there are countless other ways you can track your finances.
The important thing is you find a way to track your finances that works best for you and then you actually track and manage your finances on a regular basis.
Simply paying attention to your finances can show you where you are struggling and where you are excelling. All you have to do is be aware and hopefully you finances will automatically begin improving.
What is your favorite way to track your finances? Do you prefer to use Excel, something like Quicken or an online tool such as Mint or Personal Capital? Let me know your thoughts in the comments below!
Just FYI, there are affiliate links for Personal Capital in this article. Basically, that means if you sign up for Personal Capital through one of my links I may get a small commission to help support Money Manifesto. Nothing will be different for you though, so no worries. If you do sign up, thanks for supporting me and this site!
Photo by: 401(k) 2013 Text added by: Lance Cothern