Do You Track Your Income and Expenses?

Posted by Peter

I was talking to a friend this week about the personal finance software from Mint.com (here's a Mint review), mentioning how I had been using it to track our income and spending, and he mentioned that they didn't currently really track their spending at all.

When I expressed my surprise, and asked how they knew how much they had in their accounts, or if they were spending too much, he said they just had a feel for how much they had, and if they overdrew their accounts, they had the overdraft protection so they didn't have to worry about it.

I told him I thought he should look into tracking their budget a bit closer and they might be surprised how much money they're spending in certain categories.

For us we found after tracking in Mint.com that we were spending in excess of $800 a month on eating out.  Crazy!   We were able to setup a budget within Mint and track our spending a little closer, and that allowed us to get a hold on those out of control expenses, and end up with more money in our savings at the end of the month.

We also set it up to keep track of our savings goals, and it was satisfying to see us creep closer every month to reaching our goal for a vacation, and a new car (paid for with cash).

If you want to get a hold of your spending as well, I highly recommend Mint.com.