How to Track Expenses - Molen & Associates

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.”

Tax Implications of Inheritance: Understanding Estate Taxes, Inheritance Taxes, and Step-Up in Basis Rules

Inheriting assets can be a complex affair, especially when it comes to understanding the tax implications involved. This article delves into the intricacies of estate taxes, inheritance taxes, and the step-up in basis rules, providing a comprehensive overview for...

Healthcare and Taxes: Navigating Health Savings Accounts (HSAs) and Medical Expense Deductions

Healthcare costs can be a significant financial burden, but tax-advantaged accounts like Health Savings Accounts (HSAs) and deductions for medical expenses can help mitigate these costs. Understanding these benefits can lead to substantial tax savings and financial...

Tax Credits for Families: Navigating the Child Tax Credit and the Child and Dependent Care Credit

Tax credits are essential tools for reducing the tax burden on families, helping to increase disposable income and financial stability. Among these, the Child Tax Credit (CTC) and the Child and Dependent Care Credit (CDCC) are particularly beneficial for parents and...

Retirement Contributions and Taxes: Understanding the Tax Implications of Contributing to IRAs and 401(k)s

When planning for retirement, understanding the tax implications of contributing to retirement accounts such as Individual Retirement Arrangements (IRAs) and 401(k) plans is crucial. These accounts offer valuable tax benefits, which can significantly impact your...

Texas has been declared a Federal Disaster. What does this mean?

With the storm and power outages last week, Texas has been declared a Federal Disaster. What does this mean? When a state is declared a federal disaster area by the President of the United States, it triggers a series of federal assistance measures under the Robert T....

The Strategic Advantage of Cost Segregation in Tax Planning

In the complex landscape of tax planning and asset management, cost segregation stands out as a pivotal strategy for property owners and real estate investors. This article delves into the essence of cost segregation, its benefits, and how it can be effectively...

Charitable Planning: A Strategic Approach to Philanthropy and Tax Benefits

Charitable Planning: A Strategic Approach to Philanthropy and Tax Benefits In the realm of financial planning, charitable planning stands out as a multifaceted strategy that not only furthers philanthropic goals but also offers significant tax advantages. This article...

Maximizing Tax Benefits through Strategic Business Vehicle Usage

Maximizing Tax Benefits through Strategic Business Vehicle Usage In the realm of business operations, the utilization of vehicles plays a pivotal role in ensuring efficiency and effectiveness in service delivery, client engagement, and overall operational logistics....

Understanding the 529 Savings Plan: A Comprehensive Guide

Understanding the 529 Savings Plan: A Comprehensive Guide In the realm of education financing, the 529 Savings Plan stands out as a pivotal tool for families and individuals aiming to manage the rising costs of education. This article delves into the intricacies of...

Tax Scams and Fraud: Navigating the Maze of Tax Scams and Fraud Awareness

Stay Alert: Navigating the Maze of Tax Scams and Fraud Awareness In an era where digital convenience meets sophisticated cyber threats, tax scams have emerged as a significant concern for taxpayers. The Internal Revenue Service (IRS) continuously warns the public...

Request an Appointment Today

3 + 12 =

Call us at

Pin It on Pinterest

Share This