The simple expense tracker–over 1,000 downloads

Not long ago I introduced a free spreadsheet called “The Simple Expense Tracker” to help people record their expenses. The spreadsheet tabulates expenses and income, and it automatically calculates monthly and yearly savings and spending by category. It’s not as fancy as the software on websites like mint.com or wesabe.com. But it is a spreadsheet that I use, and what it lacks in features, it more than makes up for in privacy control (your information is not stored online) and simplicity (no graphs, just the most important numbers).

I shared the spreadsheet on this website hoping that a few like minded readers might find it useful. To my great surprise, the spreadsheet has gotten over 1,000 downloads and I’ve gotten many emails on how useful it has been. I want to take this opportunity to thank all of you for trying it out and spreading the word.

If you’re new to this site and you’re interested in tracking expenses, you can find the file in my Financial Tools page.

Here is a preview of the simple expense tracker:

Do you track your expenses?

If you track expenses, or if you use the simple expense tracker, I’d love to hear why you think it’s a great idea. Please share in the comments to help people get motivated. I think tracking expenses has been the single most important decision I’ve made financially. I have become more conscious about spending and I feel comfortable having a record to know that I’m maintaining my savings goals.

More about expense tracking

I’ve written about tracking expenses before, and here are a few of my favorite articles on the topic to get you started:

Track your money–saving advice from the richest American

The Advice

“Now let me leave this little word of counsel for you. Keep a little ledger, as I did. Write down in it what you receive, and do not be ashamed to write down what you pay away. See that you pay it away in such a manner that your father or mother may look over your book and see just what you did with your money. It will help you to save money, and that you ought to do.”

The Background

The advice comes from the richest American (according to Fortune), John D. Rockefeller.

The words were delivered almost 111 years ago to a group of young adults about how to save money and why to donate to charity. The speech is fascinating, and you can read much of it at the Rockefeller Archive Center.

Rockefeller explained that money alone makes you numb. He defines the poorest person in the world as one who only has money. Wealth is about purpose, he says, because “money is good if you know how to use it.”

Oh, and he practiced what he preached. Rockefeller kept an immaculate record of how he used his money. At one point in the talk, Rockefeller reads from his ledger about how he spent his money from over forty years before ($9.09 on clothing over six month, 35 cents to a teacher, and 10 cents one month to a foreign mission). Remember, this is what the richest guy in America chose to tell young people about saving and giving to charity.

Do you even remember where you spent money last week? Can you guess how much you spent last year within $100 or $1,000?

Why you should track your spending

A fool and his money are soon parted.

When people ask me how they can improve their spending habits, I start by asking them some questions. How much did you spend on gifts last year? What percentage of your income do you spend on gas? Most people give some answers, but then admit that they are not exactly sure. Occasionally, a person gives me a defensive answer that the questions do not matter because “I know where my money is going.” I can’t fully dispute that claim, but I am skeptical. If you cannot quantify two major discretionary expenses, do you really know where your money is going?

The truth is, without proper analysis, most of us have only a vague sense of where our money goes. As I wrote in my post about one way to calculate a tip, most of us are not human calculators.

If you’re not convinced about tracking expenses, I explain a couple major benefits below. It is not hard to track expenses nor is it time consuming (it takes me less than five minutes a day). If you are ready to start tracking, skip ahead to the section on the ways to track expenses.

Is there a right way to track expenses?

The real purpose of the expense tracker is to help you make better decisions. When you know where your money is going, you can then make decisions on how to improve your situation. When I started tracking my expenses, one of the first things I learned was that I spent way too much eating out, so I started cooking at home a lot more. These broad-reaching plans are what I call “global financial decisions” since they account for the overall state of your money and not just one-time decisions, like whether an ATM is worth the fees if you need cash right away. (my answer: yes for a few times, no if it becomes a pattern)

Once you start tracking expenses, you will likely improve your personal finances by planning better and making better decisions. And that will get you a lot further than simply thinking about personal finances as a money-oriented field.

Thanks again for your support

Feel free to forward this article to anyone you think could benefit from tracking expenses. And as always, if you have a suggestion for the expense tracker, please send me an email and I’ll see what I can do. Thanks.