Step 1 of 12 to Financial Wellness: Track Your Spending

January is just about over — already! 2022 is starting to fly by. 

Unfortunately, it's by this time of year — about four weeks after New Year's Day — that a lot of you have called it quits on those new year's resolutions. 

CommonWealth One is here to get you back on track! Every month this year, we'll focus on one step of a journey of financial wellness. Follow along, and at the end of the year, you’ll have mastered the tools for a life of financial wellness.

Tracking Your Spending

Tracking your spending and identifying your money drains is the first step toward greater financial awareness and responsibility. Use the tips outlined here to successfully master the skill of tracking your spending.

But how can you track every dollar you spend when you make multiple purchases each day, including some (like subscriptions) that happen automatically?

1. Choose Your Tools

Score one for financial technology! With the right tools, you can make tracking every dollar quick and simple. Choose from one of the following money-tracking techniques:

The easiest place for you to start is with CommonWealth One's own Money Tools. CommonWealth One offers free software that can help you monitor spending, set savings goals, and generally keep your financial life on track. Just log in to Online Banking and click on Money Tools. From there, you can monitor your spending from your CommonWealth One account and from other accounts. Plus, you can create a budget, establish savings goals, identify ways to save more and even track upcoming spending from your bills and income. There's a complete guide to Money Tools here: https://www.cofcu.org/media/lgldrtv4/moneytools-quick-start-guide.pdf 

Here are a few other options: 

Budgeting apps. If your life happens on your phone, you can download a budgeting app like YNAB or Mint to help you track your spending. Both apps allow you to allocate a specific amount of money for each spending category for each month, and will enable you to track your spending with just a few clicks. It’s important to note that YNAB is not a free app, but that it may be worth the price for users who want to take on a more active role in their money management.

Spreadsheet. If you like to see everything spelled out clearly, a spreadsheet might be a better choice for you. You’ll need to record every transaction, but if you prepare the sheet with all the spending categories you think you’ll need, this step shouldn’t take long at all. We recommend keeping up with this weekly by setting an appointment with yourself on your calendar.

The envelope system. If you’re a big cash spender, consider withdrawing the cash you think you’ll spend in a month (or in a week) and keeping it in an envelope designated for each category. When you need to make a purchase, just use money from the envelope.
Receipts. Hold onto every receipt from the purchases you make this month to help you track your spending. This can work well in conjunction with your spreadsheet!

2. Review Your Accounts

Along with one of the tools listed above, you can track the purchases you make using plastic by reviewing your monthly checking account and credit card statements at the end of every month. You may receive these in the mail, or you can access them online by logging into your account and downloading. You can set up YNAB or Mint to download these for you!

3. Categorize Your Purchases

At the end of the month, use your chosen tool to review all the purchases you’ve made throughout the month. If you’ve used an app or a spreadsheet, adding up your purchases to find the total amount of money spent will be simple. The app or spreadsheet may have already helped you divide the money spent into separate categories as well. Similarly, if you’ve used the envelope system, you should know how much you spent on each kind of purchase this month. However, if you’ve chosen another method to track your spending, you’ll need to crunch some numbers to get an accurate picture of your spending habits.

When completing this step, don’t forget to include any automated payments you may rarely think about, such as subscription fees, insurance premiums or any bills that get automatically debited from your account.