How does expense tracking work?

This article is about everything one should know about expense tracking and how it can benefit you in the long run.

Step 1: Make whatever purchases you need on a day-to-day basis.

Step 2: Enter it in the expense-tracking app on your phone.

Step 3: Review it occasionally and make mental notes to adjust spending in the coming days/weeks/months.

You don’t have to use an app. Some people prefer pen and paper – that’s fine too. Some people like using Excel or Google Spreadsheets. If it works, it works.

Example: Mimirello’s (free downloadable) spreadsheet. Straightforward, right?

Image source:

And this is what @debtfreemy’s looks like…

Other expense tracking apps include the following:

• HomeBudget
• iRekaSoft
• Buku 555
• Money Coach
• YNAB (You Need A Budget): this comes highly recommended but is subscription-based
• Toshl
• Budgie
• Every Pocket
• Money Manager
• Trabee Pocket

Making the habit of expense tracking easier

1. Lock down categories that work for you

In bold = Expenses that can’t be avoided, but try to make the most of it when you can (Example: getting reward points when paying for electricity).

In italics = Things that you pay for a better quality of life and avoid being an uninteresting person in general. Don’t put a limit to it, but don’t go overboard either.

Business – website maintenance, tools (if you have one)

Dates/Travel – self-explanatory

Donations and gifts – self-explanatory

Food – for the occasional Chatime and Rotiboy (not groceries)

Groceries – Gotta eat

Insurance & Medical – self-explanatory

Loan Repayment – if any

Misc Needs – Things you need to function as an adult. Doesn’t occur frequently enough to warrant its own sub-categories. Ranges from new passport fees, sunblock lotion, home repair costs, etc.

Misc Wants – Things you want, usually when you’re weak and/or can’t resist a great deal. Stuff like new clothes, accessories, home decor, etc.

Mobile – self-explanatory

Public Transport – Grab, LRT

Social – Gotta meet people and socialise

Utilities and Rent – self-explanatory

If you want to check how much you spend on fashion/makeup/gaming/hobbies on a monthly basis, this is a good way to find out. If you just want two categories: Necessary Purchases and Unnecessary Purchases, feel free to do that too.

2. If you forget the actual amount, an estimate will do

As much as possible, try to log those expenses immediately, but you’re no robot. What you can do is request for a receipt and keep that in your wallet to sort out later.

If you don’t have that, then just log in an estimate, rounded up. Extra bonus in this method: you automatically deduct expenses lost outside of your control, like if you dropped money somewhere (touch wood!), or if whatever service you’re using incurs a fee you missed.

3. Not sweating the small details

You don’t have to track across different bank accounts and credit cards. Just put all your expenses into those 13 or so categories, regardless of where they’re deducted from. It’s easier that way because you intentionally limit your banking to just two major banks and three credit cards usually.

4. Automating recurring expenses

Some apps have a feature to automate recurring expenses, so you don’t have to keep logging that in monthly. These include things like rent, insurance, ASB loan, laptop instalments etc.

What you can do with all the data

Stop wondering where your money went: You’re effectively a detective, digging up your own doings.

Find out from the data what you prioritise/value in life: Maybe you’ve been in denial about your shopping addiction, and seeing the actual amount spent is just what you need to whip your finances back into shape.

Tweak your spending for the coming months: If you think you spend too much on food, you might decide to pack your lunch instead at least for the next few months to bring the average down.

Motivate yourself to be debt-free: Getting into the habit of expense tracking can be enough to deter unnecessary spending in the first place. Note: for extra, extra motivation, join the #debtfree community on Facebook, Twitter and Instagram.

Quickly check when you made certain payments. Adding notes when you track expenses is incredibly useful.

Set “money challenges” for yourself: Challenge yourself to have no-spend days. Or “spend below RMxxx for Social category in X month”. Or “zero unnecessary spending week”. Whatever rocks your boat!

This article first appeared in

Suraya is a corporate writer-for-hire and the blogger behind personal finance website Ringgit Oh Ringgit. She is more of a minimalist, less of a consumerist, a konon DIY enthusiast, a let’s-support-small-businesses-over-big-corporations kinda girl. Prior to her current role, she worked in various capacities within the non-profit industry.