Tracking your expenses doesn't have to be a time consuming or complicated task. It can be as simple as writing down everything you spend.

1. Decide which categories you want to track.
   
   You may want to track every dollar you spend or only the items you have control over. For example, items such as your mortgage/rent, property taxes and insurance are probably the same each month so tracking them may not help you (although you do need to know how much of your money must be reserved for those items). However, you can influence the amount you spend on items such as food, cable/Internet, phones and vehicle expenses by changing your consumption habits.
   
   
2. Set a weekly or monthly budget for each category.
   
   If you have a difficult time managing your money, set a weekly budget. That way you will be able to identify any problems early in the month.
   
   
3. Every time you spend money write it down in the appropriate category.
   
   Write down every penny you spend. Record the actual purchase made. If you put something on your credit card, write down the amount of the item purchased, and make sure you have the cash to pay for it when the bill is due. If you withdraw $100 in cash, don't record the $100; record the specific items you spent that cash on.
   
   
4. At the end of the week or the month compare your spending to your budget and make adjustments for the next period of time.
   
   Are you under budget? Great. Carry this amount into the next budget period or take the extra and put it into savings. Remember that some of this extra money is also for unexpected items. For example, if you are tracking vehicle expenses you might budget for gas, parking, and insurance. Did you set aside money for regular maintenance (oil changes) or repairs?
   
   Are you over budget? Look at where you spent your money and decide where you need to cut back. Readjust your budgets for each category as needed.
   
   Look at each category as well as your budget overall. You may need to shift some of your budget dollars to other categories.

Need help creating a budget? Use the Home Budget Planner.