Stay Ahead of Law Changes & Protect Yourself Against Being Audited: Corporate Transparency Act and Reasonable Compensation

How to Track Expenses

There are many different methodologies, tools, tips, and tricks for tracking expenses, and it ultimately depends on your lifestyle and how actively and accurately you want to track them. This is information I’ve pulled from other sources and compiled into a few paragraphs. Why should anyone be concerned with tracking expenses? Simply put, it is easy to spend money when you are not paying attention to how much. Healthy long term financial vision takes a lot of planning and discipline, and tracking your expenses helps you ensure that you’re staying the course. 

What expenses should I track?

Everything that cost money. 

Tracking your spending on a regular basis can give you an accurate picture of where your money is going and where you’d like it to go instead.

How do I create a budget?

A budget can help you accurately identify all the bills you need to pay in the future. Prior to planning and plugging in numbers, make sure to list out all your monthly expenses. 

How do I track daily expenses?

Most people know the importance of keeping business receipts in case they’re audited. The problem with paper receipts is that it’s easy to lose such an important document. By immediately uploading these into an expense tracker app, you save space and time instead of having to dig through a shoebox full of receipts come tax time.

Many of these expense tracker apps do more than receipt tracking. You can monitor your credit, send invoices, create a budget, reconcile accounts, track the performance of investments, and create mileage records. Most of these apps are free or very low cost. 

We reviewed 30 different expense tracker apps to determine the best options available. Each app should have the ability to sync and categorize account transactions, be reasonable in price, and offer reporting tools to better leverage your personal and business financial health.

The Best Expense Tracker Apps for 2023

Here are 3 easy steps to help you start tracking expenses:

  1. Record as you go
  2. Track after the fact
  3. Automate the process

How do you categorize expenses?

Begin by grouping your expenses. Some personal finance websites and credit cards automatically tag your purchases in categories like “department store” or “automotive.” You might find that those impulse buys at Target are costing you a lot. Or maybe you’ll realize you’re paying for recurring subscription services that you could do without.

Then, sorting those expenses into needs and wants can help you organize your budget and prioritize spending, especially if you need to trim costs to make room for savings or debt repayment.

Needs:

These are the expenses you cannot avoid. If you use the 50/30/20 budget, these should account for 50% of your spending. Necessities often include the following:

  • Housing: Mortgage or rent; homeowners or renters’ insurance; property tax (if not already in the mortgage payment).
  • Transportation: Car payment, gas, maintenance, and auto insurance; public transportation.
  • Health care: Health insurance; out-of-pocket medical costs.
  • Life insurance.
  • Utilities: Electricity and natural gas; water; sanitation/garbage; internet; cell phone and/or landline.
  • Groceries, toiletries, haircuts, and other essentials.
  • Childcare.
  • Student loan payments; other minimum loan payments; child support or alimony payments.

Wants:

These expenses may be harder to account for in a budget, as they don’t always come with a set monthly fee. If you use the 50/30/20 budget, wants can account for up to 30% of your spending.

  • Clothing, jewelry, etc.
  • Dining out, special meals in (steaks for the grill, etc.).
  • Alcohol.
  • Movies, concerts, and event tickets.
  • Gym or club memberships.
  • Travel expenses (airline tickets, hotels, rental cars, etc.).
  • Cable or streaming packages.
  • Self-care treats like spa visits and pedicures.
  • Home decor.

Savings and debt repayment:

This is the money you’re putting toward your retirement, emergency fund and other savings, and using to pay down high-interest credit cards and other “toxic” debt like payday loans. It also includes anything over the minimum payment on your “good debts” such as your student loans and mortgage. In the 50/30/20 budget, this should account for 20% of your income.

  • Emergency fund.
  • Savings account.
  • 401(k).
  • Individual retirement accounts.
  • Other investments.
  • Credit card payments (see budget tip below).
  • Extra payments on mortgage.
  • Extra payments on student loans.

https://www.nerdwallet.com/article/finance/tracking-monthly-expenses

https://www.cnbc.com/select/how-to-track-expenses/

https://www.thebalance.com/how-to-track-your-expenses-2385695

https://www.investopedia.com/best-expense-tracker-apps-5114591

The Molen & Associates Difference

Mike Forsyth

“Super helpful and timely. This is our first year with them and we look forward to trusting them with our taxes and business books for years to come.”

Caitlin Daulong

“Molen & Associates is amazing! They run an incredibly streamlined process, which makes filing taxes a breeze. So impressed with their attention to detail, organization, and swift execution every year. Cannot recommend them enough!”

Sy Sahrai

“I’ve been with Mr. Molen’s company for few years and I felt treated like family respect and dignity. They are caring, professional and honest, which hard to find these days. Love working with them.”

In-Kind Donations: Understanding Their Impact on Taxes and How to Account for Them

In-Kind Donations: Understanding Their Impact on Taxes and How to Account for Them In-kind donations are a valuable way for individuals and businesses to contribute to charitable organizations. These non-cash contributions can take many forms, from donated goods and...

Tax Loss Harvesting: A Strategic Guide to Reducing Your Tax Bill

Tax Loss Harvesting: A Strategic Guide to Reducing Your Tax Bill Investing in the stock market comes with its share of ups and downs, but even losses can offer a silver lining through a strategy known as tax loss harvesting. This technique allows investors to turn...

How to Deduct Your Travel Expenses for Business

Maximizing Your Tax Savings While Traveling Traveling for business can be a great opportunity to mix work with leisure while benefiting from significant tax deductions—if done correctly. However, many small business owners overlook travel deductions, missing out on...

Almost the Last Chance to Claim the 2021 Employee Retention Credit (ERC)!

Time is running out for eligible businesses to claim the valuable Employee Retention Credit (ERC) for 2021. If your business hasn’t taken advantage of this substantial tax credit, there’s still a window of opportunity—but it’s closing fast. The deadline to amend your...

Understanding RMDs: What They Are and Why They Matter

Understanding Required Minimum Distributions (RMDs): What They Are and Why They Matter When planning for retirement, it's essential to understand the various rules and regulations that govern how you can access and manage your retirement savings. One of the most...

What If an S Corp Owner Can’t Pay Reasonable Compensation?

What If an S Corp Owner Can’t Pay Reasonable Compensation? One of the most common questions we receive from S corporation owners is: "What happens if I can’t afford to pay myself reasonable compensation?" The answer is both simple and complex. While business owners...

S Corp Owns Rental Property: What Happens If You Die?

What if you die and your S Corp owns rental property? Owning rental property through an S Corporation (S Corp) can offer various tax advantages and liability protection during your lifetime. However, the situation becomes more complicated when the owner of an S Corp...

Understanding EIN Numbers: Common Pitfalls & Everything You Need to Know

Understanding EIN Numbers: Common Pitfalls & Everything You Need to Know - EIN Filing & Business Success Success with Business Formation & EIN Filing: When starting a business, one of the first steps is obtaining an Employer Identification Number (EIN)....

How Can I Make the Most of my Tax Meeting?

Maximize Your Tax Advisor Meeting: A Comprehensive Checklist We meet with a lot of clients and complete a lot of tax returns during tax season, so time is very precious! We want to make the most of each minute we spend with you, so we have compiled a list of a few...

How to Determine Your Tax Withholding: A Comprehensive Guide

How to Determine Your Tax Withholding: A Comprehensive Guide Understanding how to properly set your tax withholding is crucial for managing your finances and avoiding surprises at tax time. Whether you’re an employee deciding much to withhold in each paycheck or a...

Request an Appointment Today

11 + 12 =

Call us at

Pin It on Pinterest

Share This