If you are responsibly managing your finances, odds are that you are keeping track of your expenses in one way or another. Are you using the best option available? This is a great question to ask; one which I hope to explore in this article.

calculator receipts

What’s the Best Way to Track Expenses?

Expense Journal

It was just a few months ago that I was taking a trip out west with some friends from college. One of my good friends pulled out his small notebook with receipts and started writing down the expenses from the last two days in his notebook.

I was quite surprised to say the least. Not because he doesn’t strike me as financially responsible – he does indeed. What surprised me was his dedication and how much work was involved in his method of keeping track of his finances. At the same point, who can blame him.

Keeping track of your expenses by writing them down in a journal or notebook has been a viable and responsible way of keeping track of your expenses for a long time. The benefits are obvious: you are not only able to keep track of every expense, but can (at any time in the month) know how much you have spent that month.

If you are using this method, you most likely keep a rough running total of how much you have already spent in your head. The only down side to this approach is that it is possible to forget to write something down. If you forget your journal when you go out to eat, will you remember to write down the expenses when you return home?

Credit Card Statements

Another viable option is to use the credit card statements each month to calculate how much you spend. This is a great way to minimize that time spent on keeping track of expenses throughout the month.

You can easily figure out how much you spent on different categories with an hour or two of calculations each month. This allows you to also reap the benefits of credit cards. For example, the many credit cards offer great rewards (5% off rotating categories throughout the year) and has no annual fee.

Someone buying the same items with cash would be losing out on the opportunity of this 5%. The only downside to this approach to track your expenses is that you can often lose track of how much you have already spent in the month. However, if you are disciplined enough, it can be worth it.

The other thing to keep in mind is that your credit card statement could have mistakes, so you need to be able to determine whether it is accurate based on your memory. If you have a horrible memory, this probably isn’t the method for you without some extra measure to double check the accuracy of your statement.


I know of several people that are receipt freaks! They get a receipt at every place they go and keep every single one. At the end of each month, they use these to figure out how much they spent for the month.

This gets rid of the risk that accompanies using just credit card statements and also keeps them from having to write the expenses in a journal. The downside to this method is that it requires keeping track of all those receipts.

You can easily create a system to file these, but some of the receipts fade over time. There are also instances where it is impossible to get a receipt.

Best Way to Track Spending: Online Services

The last major option available to keep track of your all your expenses is to use an online service that does it all for you. An example of this is Personal Capital.

These services bring in all of your electronic expenses and are able to produce user-friendly services like pie charts. This gets rid of all the necessary calculations or receipt-keeping. In this day and age, something like Personal Capital seems to make a lot of sense. One of the best things that I like about Personal Capital is that it is absolutely free and they plan to keep it that way.

Within seconds of logging into your personal capital account, you can quickly see your spending and income over the past 30 days. (Personal Capital is also a great free tool of keeping an eye on your investment portfolio.)

What do you think? Are you willing to give up the security or tradition of the more traditional ways of tracking your expenses each month? How do you track your expenses?