How and Why to Track Your Personal Expenses

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Most people learn how to swim before they venture into open water. So why not do the same with your expenses?

It’s always better to avert a problem before it has the chance to arise, and the best way to do this is by employing preventative measures rather than reactive ones.

And yet, when it comes to tracking expenses, so many people wait until a problem arises before they realise it’s time for things to change. Perhaps school fees are higher than they expected. Or they need to find funds for their rent payment, and realise that they’ve spent too much that month. Cashflow problems can happen to anyone, and most often they leave people scrambling to find a solution. But these ‘solutions’ typically only resolve the immediate issue without preventing it from re-occurring.

It doesn’t have to be this way. Here are the steps that I took from tracking nothing to having complete ownership of my spending.

Nothing (aka Bank Statements)

In mid-2016, I was a counsellor in a Los Angeles summer day camp with a group of people my age, twenty years old. We’d get some spending money as a sort of ‘salary’ each week, and I had some money I’d saved up from various odd jobs done in the preceding few months.

After camp ended, I was shocked to see that my bank balance was far lower than I expected. There had been no large purchases and no fraudulent charges. Thankfully, I was a student at the time, and I didn’t have many fixed expenses, but I was concerned that I’d spent a considerable amount of money without really knowing where it had all gone.

I spent half a day painstakingly examining my bank statements in an effort to piece together every transaction from the last eight weeks.

There were several issues with this approach:

  • Some of the money I had spent and received had been in cash, leaving no paper trail
  • Our group had done a lot of laying out and paying back, so it wasn’t always clear why I had transferred or received specific amounts to people
  • Many manual calculations were involved which took a long time and were prone to human error
  • Many of the bank statement descriptions were obscure and unhelpful, leaving me to guess what they were for

It took a while, but even when I had everything totalled and reconciled, I still didn’t have a clear picture of how I’d spent my money. I resolved that I’d never do this again, and that meant finding a solution to at least track my expenses, let alone keep them in check.

This ‘solution’ isn’t sustainable. When people say that they check their bank statements in order to know what they’re spending, what they’re really saying is that they don’t track their expenses at all.


It’s not for nothing that my friends often joke about my use of spreadsheets. We might be arranging tickets to the football, or something else involving zero calculations, and they ask if I’ve set up a spreadsheet.

Studying IT Applications in eleventh grade gave me a good background in setting up and using spreadsheets. It wasn’t a popular subject choice, but I have always found it very practical. You can easily learn how to use formulas online, but the conventions of preparing a spreadsheet aren’t as commonly known (and many don’t know that such conventions even exist).

Not long after camp in Los Angeles ended, I set up a sheet in Google Sheets with all the bells and whistles that I could think of. Dropdown menus, checkboxes, pivot tables, conditional formatting, filtered views — the lot.

And it worked well. Whenever I spent money, I’d put it into the sheet: date, description, amount, category, method of payment (debit, credit, cash, etc.), and notes if applicable. There was also a checkbox if a transaction was tax-deductible, such as a charitable donation.

Using the pivot table, at a glance I’d be able to see spending broken down by category, date, method of payment, or any mixture of the three. I quickly got into the habit of spending the fifteen seconds on the Google Sheets app each time I swiped my card.

Having these totals in front of me caused me to rethink my spending. Each transaction became part of a larger picture that I’d actually be able to interpret on-demand. If I wanted to know how much I’d spent my credit card on travel in July, I could have done so in a moment. This led me to be more conscious of each transaction, and therefore more responsible. Whether such knowledge would cause you to cut back on spending depends on the particulars of your situation, but it’s crucial to have the information at hand if you need it.

There were, however, some drawbacks of using a spreadsheet that eventually caused me to upgrade to a better solution:

  • Entering expenses was a manual and repetitive process
  • The Google Sheets app interface isn’t exactly designed for constant use
  • The spreadsheet didn’t connect to my bank, so unless I checked the bank statements, there was no way to ensure that I’d entered everything accurately
  • If I’d lay out for group expenses, I would only record my portion of it. The bank, however, recorded separate transactions for the amount laid out and the reimbursements from the group, which meant that things wouldn’t always line up easily

I knew intuitively that although a spreadsheet was better than nothing, it couldn’t be the best way to track expenses.

Ultimately, Apple’s famous mantra “There’s an app for that” proved true.


Just as we don’t know what we’ve got until it’s gone, we sometimes don’t know what we’re missing until we get it. This was, and still is, my experience with using the Pocketbook app.

It easily solves the problems I had with the spreadsheet. It connects to my bank accounts and pulls transactions daily. The bookkeepers out there will know of this feature as ‘bank feeds’. The date, amount, and description are already there, and all that’s left for me to do is assign a category (and notes if I wish). Pocketbook’s machine learning picks up how you assign expenses, and then starts to do it for you automatically.

I’ve been using Pocketbook for a few months, and it correctly categorises eight or nine out of every ten transactions. If it gets it wrong, it’s simple to reassign it, and you can create custom categories to suit your lifestyle. So I really don’t have to do anything at all, except add the odd note here and there if the bank description isn’t clear. The repetitive data entry process of the spreadsheet has been all but eliminated.

Additionally, as Pocketbook uses bank feeds, there’s no need for manual bank reconciliation. I can rest assured that the amount of every transaction that comes through is accurate, and that the balance displayed is correct.

When it comes to laying out for group expenses, Pocketbook has a partial solution. It’s not perfect, but it’s far better than the spreadsheet. You can assign incoming amounts (the reimbursements) to the same category to which you assigned the initial outlay. For example, if you laid out $20 each for dinner for yourself and four others, your Food & Drink category would show $100 money out and $80 money in. Like I said, not perfect, but does allow you to understand that you haven’t actually spent the $100.

So that clears up the spreadsheet issues that I had, but Pocketbook also has an array of different features that I now use all the time.

I can attach receipts to specific transactions, which is especially useful for tax-relevant transactions.

If you use multiple bank accounts such as a transaction account, savings, and a credit card, you’ll be transferring money between these accounts on a regular basis. Pocketbook understands this, and gives you the option to exclude transfers between accounts from the calculations showing money in and out.

In terms of visualisation, the app displays clear bar charts with categories of spending and receiving, and these can be filtered by date ranges. Pocketbook also has a desktop interface with more detailed reports.


I have to admit that no software will ever be as customisable as a spreadsheet where you can add any column or formula that you wish. But when there’s an app like Pocketbook with its full suite of features, you barely lack for anything. If I was here to champion the use of this app, I’d also describe its user interface and ease-of-use, but what I’m really championing is the function of the app, which is expense tracking. (There are alternatives out there; Pocketbook is compatible with Australian bank accounts, which is why I chose it.)

The point of my going through these steps is to illustrate that expense tracking does not have to be a tedious or arduous process. You’d be hard-pressed to find someone in their right mind who actually opposes the idea of keeping tracking of their spending. Most people just don’t get around to it until they desperately need to.

And that’s no way to live.

The time you might save by not tracking your expenses will catch up with you — and be significantly outweighed — when the need suddenly arises to marshal your funds or find out where they’ve gone. My simple advice is: don’t wait until then.




Freelance writer and editor who loves the feeling of a new book.

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Yakir Havin

Yakir Havin

Freelance writer and editor who loves the feeling of a new book.

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