The first step to budgeting is knowing where your money is going. Many of you probably save your receipts and promptly turn them into the accountant during tax time. This is great, but you may not have an idea of where your money is actually going.
Let’s break down some easy-peasy ways to track your expenses. You’ll need to schedule some time each month to work on this. Think of this as a very important appointment with yourself.
The Old Standbys
These are the most widely used systems for tracking expenses, and happen to be what I use.
- Quickbooks is my favorite program to use, but it is expensive ($100-300) and can be tricky to learn. I recommend this if you are interested in getting very detailed reports about your expenses. I also think it’s essential to have something like this if you are tracking inventory. If you don’t like numbers or don’t have very complex systems, then this is not the best program for you.
- Excel is also one of my obsessions. (Yes, I am a total nerd.) I love cells and rows and columns. If you don’t have many transactions each year, excel is a good place to start. It’s easy to use, and most people have it on their computers. If you aren’t trained in excel, an inexpensive course at the local college will give you the basics.
These are new online programs for tracking expenses. They are user friendly and, in some cases, FREE.
- Wesabe (www.wesabe.com) is a great online tool for tracking your expenses. Wesabe allows you to link your bank accounts to the website. From there, you can have a look at all of your expenses in one place. You can tag and itemize items. There are also great tips available for your planning. Take a tour of Wesabe here.
- Mvelopes (www.mvelopes.com) is an online tool known for it’s ease with budgeting. If you are a photographer and are saving up to buy a new camera, this system would allow you to save your money in a “virtual envelope”. The program is set up for personal financing, but would work easily for small businesses. You can try it free for 30 days and then enroll in a quarterly or yearly plan. Take a tour of Mvelopes here.
- Your bank may have some easy online expense tracking and budgeting options. Wells Fargo allows you to categorize expenses when you send payments using their bill pay. American Expense often sends itemized bills showing charges and their classifications.
After tracking expenses for 1-3 months, you should have a good idea of where your money is going. This will make your budgeting easy to do. Tomorrow, we’ll share how to make a good budget and, how to stick to it!