As previously discussed, there are computer programs and Web applications that can help with the tracking of your daily expenses, but even these approaches require effort. You will have to learn how to use the programs, create your expense categories, properly "tag" each of your expenses, and prepare a report. Most importantly, you still have to track and correctly record your expense items that are not available from your bank and credit card companies. For example, even though the bank record will tell you that you got $300 over the month from the ATM machine, you need to record precisely how you spent that cash and then enter that information into the computer programs.

Especially for the initial exercise of tracking and recording every single expense for a month, we have found that most people do better using worksheets, preferably printed out for daily use. Once you get used to the process of tracking, recording, and categorizing your expenses, you can always switch to one of the other two automated approaches in the future.

As the first step, however, it is still recommended that you use our worksheets to help you record and track your expenses. These worksheets are like daily journals to help you keep track of every expense throughout the month. Here's a suggested process for accomplishing this important task:

• The first step is to create an expense record for at least a one-month period. To help with this process, we have provided expense worksheets in various formats that you can save or print.
  • Two bi-weekly expense records in pdf format for printing
  • Four weekly expense records in html format for printing
  • Three-month expense record in Excel format. Primarily for those that know how to use Excel, and want to enter their data into a spreadsheet. Select and save the worksheet to your computer
• Select what day you will begin recording your expenses. Some people like to monitor their expenses on a monthly basis, so they choose to start at the beginning of the month. However, don't pick a day in the future and then forget to get started. The best option, especially for this first one, is to start today!
• If you have certain payments that are automatically withdrawn from your checking account on the same day every month, you can go ahead and enter these items on your worksheet. This could include automatic bank withdrawals, such as a car loan payment, or expenses you pay using an online bill pay system. While you have other bills, such as rent, that you normally also pay on a specific day every month, don't include these until you actually write the check.
• Record every expense you pay for by cash or cash equivalent - cash, check and debit card.
• If you get cash from the ATM, don't record the amount or the day you get the cash. Rather, record the actual purchases you make with the cash.
• For daily type expenditures, it's better if you carry a slip of paper with you to record the information on. Either record the expense right away, or get in the habit of making these notes at the end of each day. It's also advisable if you keep all receipts no matter how small the amount, at least until you have transferred the information into your worksheet.
• If at all possible, carry a certain amount of cash with you, such as $10, or write down on a piece of paper how much you start the day with. At the end of the day, count your money and figure out how much you spent. Then make sure that you can account for all of it, to the penny, and write it down on a note pad or in the actual worksheet.
• Most people like the convenience of a debit card, but they typically don't keep receipts and they usually don't check their statement every month. For the purposes of this worksheet, it's important that you write down every purchase made with your debit card and then reconcile these when you get your monthly statement.
• If you use a credit card and pay off your balance every month, record the items you purchase, preferably on the purchase date even though you don't make the actual credit card payment until weeks later. You could use the date that you actually pay the credit card balance, but the purpose of this exercise is to illustrate what you are buying and when, as well as how much.
• If you typically don't pay off your credit card balance, this spend plan becomes more difficult and even more critical since you are spending money you don't have. If at all possible, use cash for your purchases during this month while you are recording your expenses. In fact, if you are carrying balances on your credit cards, you probably should be using only cash anyway. If you must use the credit card, we suggest you record both the credit card purchases on their date of purchase and the monthly payment when you pay it. This will simulate paying cash for the item, at least for the purposes of the worksheet, and show how much you would have spent had you paid cash for the item and also paid the minimum payment on your credit card balance.
• Obviously the best way to record your expenses on your worksheet is daily, at least for this first month, although this can wait until the end of each week or the month if you are noting your expenses on slips of paper. Still, if you wait to record the expenses, you may not remember precisely what you purchased, so we recommend that you update the worksheet as often as you can.

Step 2 - Organize your expenses into categories