Budgeting and tracking your money

Tracking expenses is one of the best–and easiest–ways to get a handle on your finances. You absolutely, positively cannot make informed decisions about your money if you don’t know how you’re spending it or how much you have. If you’d like to know more about how Personal Capital works, check out my full write-up.

Without a holistic picture of how much you spend every month, there’s no way to set savings, debt repayment, or investment goals. It’s a must, folks. Personal Capital (which is free to use) is a great way for me to systematize our financial overviews since it links all of our accounts together and provides a comprehensive picture of our net worth.

Frugalwoods blog

Do you agree with the above? I don’t, I think she has it backwards. You don’t set saving, debt repayment and investing goals after what you spend, you set – and implement – them first which then determines how much you have left to spend and how much you may have to adjust spending.

If you wait until after spending, you may never save or save less than is actually possible – and necessary.


  1. I Have an excel spreadsheet monthly budget, and use it mainly to remind myself of what must be paid and when…I also want to say that I’m very against ant internet based application that has access to my financial accounts to track/consolidate investments and/or spending (budgeting) patterns. In my opinion it significantly increases the exposure to security breaches against your financial assets.


  2. I’m in agreement that savings should come out of the paycheck and thereby at least get equal treatment with Uncle Sam who wants his cut out of your earnings before you get them. The same principle holds true for the self employed.
    However, there are many young people and a lot of not so young also, that run out of money before they run out of month and they have no idea where the heck the money went. If they had automated savings that would be the first thing they would tap to cover the shortfall. These folks have to learn what they are spending on and how to cut back thus needing to document where it went. After a couple of months perhaps they can get back to saving first.

    I know it it sounds odd to people who know where and what they spend but a lot of folks have no clue.


  3. I also subscribe to the Frugalwoods, but agree 100% with your assessment – Savings must come first!  I use Frugalwoods more to get more ideas on cost savings and read about a family that is doing this every day, but savings need to come first.  With cost cutting, you should be able to set even more aside for savings.


    1. On her last expense post I commented it didn’t contain the usual $200-300 for beer and wine. She deleted my comment. Frugal is in the eye of the beholder.


  4. I agree with some of the article and disagree with some too.
    I think having a holistic view of all your finances is important for making financial decisions, including saving. I have been using Quicken since 1995 and it is great at record keeping especially at tax time. What is good about it is that it keeps all the records on my computer and not in somebody else’s data base. I manually put in all my financial transactions which only takes a few minutes a week. I keep an excel spreadsheet with my investments so I can get a real-time view of how they are doing anytime I want just by inputting current prices. I don’t have to wait for next month’s statement.
    As far as getting a FREE service to do it, NOTHING IS FREE. If you think it’s free, you haven’t figured out how they are making money on you.


    1. Nothing wrong in keeping track of finances. My objection is saying saving and paying debt can only come after knowing what you spend. Rather it’s saving and then knowing what you have left to spend and then use tracking and budgeting to learn what you can’t afford.


      1. No, paying debt comes first. If you can’t afford the debt, do not take it on, unless you go to college and you are banking on the government forgiving your student loans. But how do you know how much debt you can take on? By determining how much you are already spending. Once you learn where you are wasting your money, like on tattoos and coffees, then you can determine how much you should have been already saving.

        I do get your point that you should set a savings amount or goal. But wanting to save 10% or $100 a week or even 50% is useless unless it is realistic. Of course if you know that you need to save 15% for retirement, then you must change your expenditures or increase your income and maybe even your career. To say that you are going to save 15% for retirement starting today without determining your budget will fail as soon as the baby needs diapers later in the week.

        I do not know too many whom came straight out of high school and knew to save 10-15% for retirement. They never got into the habit. By the time that they realized that they need to save money, they think that they have no spare income. They have the mortgage or rent due, utilities, cell phone (a requirement today from banking to applying for jobs), car payments, car insurance, etc… And then there is food to buy. I doubt that there are very few people making $15/hr or less in the Northeast that can afford what I listed above and probably already have that beater car or a bus pass and living in a crappy place. I know people can make on $15/hr too but most start of bad and never get caught up.

        But you are very correct that before buying a house people should set their saving goal then determine how much mortgage payments they truly can take on first before taking on the debt. You still need a budget plan to determine if that saving goal is possible with the mortgage payment and you can’t do that unless you know what you are already spending. It is a chicken or the egg kind of thing.


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