Smart Ways to Track Monthly Expenses

Everybody can agree that tracking monthly expenses is no easy task. 

It requires discipline, effective management, and thorough planning.

But don’t worry, we’ve got some easy yet effective ways to track your monthly expenses. 

Let’s see them!

*This article is the abridged, adapted version of the blog post originally published on the Clockify blog: 

https://clockify.me/blog/business/track-monthly-expenses/ 

#1: Sort your expenses by categories (with a workable budget)

First and foremost, to track your money successfully, you must be aware of all your monthly expenditures. The most effective way to stay on top of your long list of expenses is to group them into categories. 

As for some examples of monthly expense categories, take a look at some of them below: 

• Operating expenses ⚙️ — these keep the business going and include rent, utilities, repairs, office supplies, etc.
• Payroll expenses 💰 — employee salaries and wages, bonuses, commissions, etc.
• Professional fees ⚖️ — accounting, bookkeeping, legal fees, and the like.
• Travel expenses ✈️ — business travel expenditures such as flights, hotels, meals, etc.
• Taxes 🧾 — federal or state income taxes, property taxes, sales taxes, and similar.
• Savings and debt commitments 💲 — savings funds, loans, and debt payments.
• Miscellaneous expenses — other expenses, such as subscriptions, paid software, etc.  

Grouping your expenses results in better budget control and transparency, wiser financial decisions — and improved insight into tax-deductible expenses.

#2: Build a budget (and a budgeting system)

With your expenses successfully organized into categories, it becomes much easier to keep track of them. However, to do so, you need a budget that clearly shows where your money goes each month.

💡 To create a budget more easily, try using the 50/30/20 budgeting rule.

This budgeting system is pretty straightforward, as it divides your after-tax income into 3 categories:

1. 50% of your income goes to needs — this includes operating expenses, payroll expenses, professional fees, and other important expenses for successful business operations,
2. 30% of your income goes to wants — travel or personal expenses, such as dining, tickets, outings, etc., and
3. 20% of your income goes to savings and repaying debts — set aside 20% of your after-tax income for retirement, future investments, or loans.

This great budgeting system helps you to stay within your budget and prevent overspending.

#3: Do monthly bank and credit card reviews

Another key aspect when tracking monthly spending is to review your bank and credit card statements regularly. As for statistics, only 56% of Americans do so, leaving many unaware of their spending habits or any fraudulent activity for that matter.

While bank statements offer a more complete picture of your account activities (cash flow, charges, savings, etc.), credit card statements show your balance transfers, interest charges, etc. By checking them regularly, you can spot and avoid potential problems successfully and on time.

#4: Use an expense-tracking system

Try leveraging technology to avoid the hassle of manual tracking and managing your expenses. 

With a reliable expense tracker like Clockify, manual and lengthy processes are a thing of the past.

Clockify allows you to do things automatically, such as:

• Categorizing your expenses,
• Tracking your expenses (be it by unit or sum),
• Saving business expense receipts safely,
• Setting project budget and estimates, and so much more.

In addition, Clockify allows you to track project progress and keep a thorough record of your budget. By setting estimates in Clockify, you can see how much of the budget is spent/available at all times. 

You can also see how much time was spent on a certain project, be it billable or non-billable. 

Finally, one of the best things about budgeting in Clockify is that it sends alerts when you’re close to exceeding your budget. 

Using an expense tracker such as Clockify ensures stress-free expense tracking and financial stability in the long run.

Try Clockify today