While thinking about your monthly financial picture is a great start, it isn’t enough to wrangle your expenditures. The next move is tracking your spending to determine whether your money is going to the right places. Here’s how to get started tracking your monthly budget.

Check your account statements

Pinpoint your money habits by taking inventory of all of your accounts, including your checking account and all credit cards that you have. Looking at your accounts will help you identify where you’re spending. Getting a sense for your monthly cash flow allows you to learn what’s coming in and what’s going out.

Categorize your expenses

Start grouping your expenses. Some credit cards automatically tag your purchases in categories like department store or automotive. Your spending will consist of both fixed expenses and variable expenses. Fixed expenses — rent or mortgage payments, utilities and the like — are less likely to change from month to month. You will have more room to adjust variable expenses such as food, clothing and travel.

Keep your tracking consistent

Budgeting apps like You Need a Budget and Level Money let you allocate a certain amount of spendable income each month depending on what you are taking in and what you are paying out. These types of apps will work if you are willing to log your purchases, put in the time and stick to your budget. Depending on what you get out of it, a paid app may be worth the cost.

Explore other options

Don’t want to spring for an app? A spreadsheet is another valuable money-tracking tool. You can find templates online, like a free version from personal finance application Mint. Or, if you have a more complex financial portfolio, you can buy software. Quicken Premier, which lets you import your bank transactions and monitor your investments, is one option.

Identify room for change

As you track, be ready to make adjustments. It’s worth your time to keep tabs on your monthly expenses because of what you will uncover. Tracking expenses can be very valuable for finding out what’s really costing you, and what is not as bad as you thought. 

NerdWallet