Best Way to Keep Track of Bills and Expenses
Do you want a surefire way to track your bills and expenses?
Keeping track of your bills from month to month can be such a pain!
Some of your bills are paid electronically, others are charged to your credit card, and then there are expenses you cover with cash or your debit card.
You’ve got electronic bills, paper receipts, and sometimes no records at all.
All of this makes it hard to stay organized.
And if you accidentally miss a payment because you didn’t keep track of your bills, you risk paying a big fee and damaging your credit score.
That’s why it’s important to find the best way to keep track of your bills!
Instead of risking more missed payments, going over your budget, or incurring unwanted expenses, try these tips and tricks to keep your bills organized.
In this article, we’ll cover:
- How to track your personal expenses
- FAQs about expense tracking
- Best budgeting app options
- How to organize your bills
- Keeping track of irregular bills
- Bonus bill tracking tips
Okay, let’s get started!
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How To Track Your Personal Expenses
Tracking your monthly bills is the best way to ensure you stay on top of your payments.
Let’s go over each step of your bill-tracking method in more detail.
Step One – Chose A Bill Tracking Method
The good news is expense tracking doesn’t have to be complicated, especially once you establish a system that works for you!
If you’re not sure where to start, there are a few different methods to keep track of your expenses.
The perfect tracking method for you will depend on your preference and the number of bills you have to keep track of.
Here are the most-used methods:
- Notebook: If you’re someone who likes to write down their to-do list on paper, keeping a handwritten list of your bills in a classic lined notebook is a simple way to stay on top of your expenses. Simply write down the bills you need to pay so you’ll always know what payments need to be made each month.
- Planner: Another pen-and-paper option for tracking your bills is a bill planner. This tracking method is great for someone who prefers to have a calendar view of their monthly expenses. Using a planner, you can write down the name of the bill and payment information on the day it’s due.
- Spreadsheet: Keeping track of your monthly bills using a spreadsheet is a great idea if you’re already familiar with budgeting using this method. If you already have a monthly budget spreadsheet, try creating a new sheet to list all your expenses. If you don’t want to start one from scratch, this is my Excel Bill Tracker. Here’s a Google Sheets version of the Bill Tracker if you prefer to use Google Sheets. It’s programmed to automatically list your bills in order of the due date and highlight the same bill so you don’t accidentally pay the same bill twice!
- Budgeting mobile app: For a more hands-off approach, using a budgeting tool, especially one that is also a mobile app, is a good choice. Once you connect your app to your checking and savings account, you’ll be able to see all your expenses in one handy place. With this information, you can see when each bill is due and how it’s paid, making it easy to keep track of upcoming due dates. And some apps even keep track of this information for you, making planning for future payments even easier.
After you’ve decided how you’ll track your bills, you can get started.
Follow these simple steps to get a handle on your upcoming bills and get your personal finances in order.
Step Two – List Out All Your Bills
Before you can start setting financial goals and organizing your expenses accordingly, you need to know exactly where your money is going and how the bill gets paid.
That means you’ll need to look back at past bank statements or bills to help you get organized. As you write down each bill, make sure to include the:
- Name of the bill: Give your bill a name so you know what it is. You can use the bill issuer’s name or simply label it what it is, like a mortgage payment or water bill.
- Due date: Write down the date the bill is due each month. If that date fluctuates, make sure to note what time of month it’s typically due, like the first Monday of the month.
- Method of payment: How do you typically pay this bill? Make a note of whether the bill is paid online or if you need to write a check.
- Delivery method: Include information on how your payment is delivered to the issuer, including whether you need to mail the check before the bill is due.
Step Three – Consolidate Your Payment Methods
One of the easiest ways to keep track of your bills and control your finances is to consolidate how many payment methods you use.
Decide on your preferred payment method, then change all your bills over to that method.
For example, if you prefer to pay your bills online, visit the website of each of your expense accounts and opt-in for online bill pay if it’s available.
Or, if you struggle with spending and want to keep the money earmarked for bills safe, you might open separate accounts for your bills to come from.
No matter which option is best for you, the key is to implement it as quickly as possible so that you can move on to the next step.
Step Four – Negotiate New Due Dates
Once you have your payment methods consolidated, it’s time to start looking into the due dates of your bills.
While it might simplify things to have all your bills paid at once, spacing them out throughout the month could better align with your financial needs, especially if you’re finding it challenging to make ends meet.
Think about your monthly finances and come up with a plan that works for you.
Then, start contacting your billing companies to see if you can change the due date on your account, allowing you to restructure your payment dates to suit your needs.
Step Five – Set A Reminder
Once you’ve fixed your cash flow by negotiating new payment dates, you’ll want to set reminders a few days before each bill is due.
Doing this will help you remember to make the payment or give you a chance to double-check your account to ensure there’s enough money available for an auto payment to go through.
To set reminders, you can use:
- Your budgeting app
- The reminders app on your phone
- A digital calendar tool
- Your paper planner
Anything will work as long as you remember to look at it frequently!
Step Six – Track Your Expenses Each Month
Congratulations – now you’ve got your bills more organized!
Doing this makes it much easier to make financial decisions, measure your monthly financial health, set financial goals, and create a realistic monthly budget.
But your work isn’t over yet.
To make sure you stay organized from month to month and have a clear picture of your finances, you need to take the time to track your expenses.
I recommend doing this using the same method you chose in step one, such as using a budgeting app or spreadsheet.
Doing this will help you track your spending habits.
Start by setting up your chosen method with enough space to track each expense.
Then, for each transaction, record:
- The date
- Amount spent
- Store
- Category (food, household, entertainment, etc.)
- Notes (if any)
Frequently Asked Questions About Tracking Expenses
How often should I track our expenses?
There is no right or wrong answer to this question – it’s just a matter of personal preference!
Some people like to track their expenses at the end of the day, while others prefer to track their expenses in real time.
I know people who track expenses weekly as part of their weekly finance review.
But you might even prefer to track your expenses at the end of the month before you make your new budget.
As you can see, there are plenty of ways to do it, and I recommend trying different methods to see what works best for you and your family.
Just make sure, whatever method you choose, that you have a way to capture all the expenses and that nothing is missed.
Should I organize expenses into different categories?
Absolutely, yes!
While this may seem like more work during the tracking process, it also makes it infinitely easier to set spending limits in your budget, choose where to cut expenses, and have a clear picture of your spending habits.
Do I need a monthly budget for expense tracking to be effective?
While it’s not mandatory to have a budget to track expenses, the two do work together very well for effective money management.
So yes, I would recommend it!
If you’d like to add your budget to your expense tracker, here is how I recommend doing it.
- Add your income: Start by recording your income at the top of the spreadsheet. If you get paid multiple times per month, make sure to include a line item for each payment. And if your income varies from week to week, write down an estimate or average for this amount for planning purposes.
- Put in your monthly bills: Use your list of monthly bills to include all the regular expenses you pay every month. Your monthly payments will include fixed bills, like your mortgage or rent payment, and variable expenses, like your utility bills. For the variable payments, simply include an estimate or average amount as the amount.
- Add in the other necessary expenses: On top of your bills, it’s also a good idea to track your regular monthly expenses and irregular bill payments since they’re an integral part of your budget. These expenses could include a variety of things depending on what you buy each month, but you’ll typically include categories like food, transportation, and savings into this section of your budget. To get an idea of what you’re spending in each category, look back at your past bank statements and make a note of regular payments. Average out those payments to come up with a budget amount for each category, then include that in your monthly expense tracker.
- Subtract expenses from your income: After laying out all your expenses, subtract each line item from your monthly income. The goal is to reach 0 or have a positive amount left over. If your number is negative, you’ll need to re-evaluate your spending and adjust your monthly expenses until you have a balanced budget.
- Keep an ongoing tally of expenses: Now that you have an estimated budget in place, you’ll need to keep a running tab of how much you spend each day. After you make a purchase or pay a bill, add that figure to your monthly expense tracker to ensure you’re staying on budget each week.
Best Budgeting Apps To Track Expenses
While using a bill planner or spreadsheet is a good option for some people, it may not work for you.
You may prefer something that connects automatically to your online banking, a solution that gives you an easy way to track expenses on the go, or something you can use across your and your partner’s devices, too.
This is where budgeting tools and apps come in really handy!
The good news is that there are several great budgeting apps that help you get your expenses organized and stay on top of your bill payments!
Let’s go over a few options!
YNAB
As an all-in-one money management app, YNAB offers a variety of great features to help you stay on top of your finances.
After creating an account, all you have to do is connect your checking account to the app, and it does most of the hard work for you.
The app will scan your past purchases to find patterns, helping you stay on top of your bills.
You can scroll through your past transactions and label them into categories or let the app do it for you.
After that, the app has goal-tracking options, spending and net worth reports, and a loan calculator.
While there is a free trial for this app, it is only for 34 days at the time of writing this post, and then you have to pay to use it.
One nice thing about paying, though, is you know your information is locked down, and you don’t have to worry about ads bombarding you while you’re trying to budget your money.
Bill Watch
Unfortunately, this app is only available on iOS devices, so if you use Android devices, check out the next app on the list!
But, if you’re an Apple user, Bill Watch is definitely an app worth looking into, as it has a variety of great features to help you stay on top of your bills.
The app records your income and expenses to help you stay up to date on your budget.
You can manually add your bills and due dates, then set reminders in the app when a bill is due.
In addition to helping you stay up to date on upcoming payments, the app also keeps a record of past bills, allowing you to track your payment history.
If you’re someone who has a lot of bills that get paid manually or if you’re constantly missing bill deadlines, this app is a top pick, thanks to its robust reminder features!
PocketGuard
PocketGuard makes sure you know exactly how much money you have to spend on your bills.
This budgeting app is perfect for anyone having issues getting their spending under control.
PocketGuard connects to your bank account to help you figure out how much money you have left to spend after setting aside money for bills and necessities.
Using the different charts available in the app, you can see which expenses are eating up too much of your budget.
You can stay on top of your bills using the bill tracker, which also helps you negotiate better rates on your monthly payments.
What is the Best Way to Organize Your Bills?
When you have bills coming in the mail and in your inbox, it can be difficult to keep track of everything.
So, finding the best way to organize your bills is an important step to staying on top of your monthly payments.
These simple tips can help you keep your bills organized from month to month and help you avoid costly late fees.
Open your bills right when they come in
Paper clutter is one of the biggest issues most families face when it comes to getting their homes organized.
And since you probably get at least a couple of bills in the mail each month, it’s essential that you take the time to organize your mail.
The first step to keeping paper clutter under control is to open and sort your mail right when you bring it inside. Throw away all the junk mail, then organize the rest of your important mail.
Keep your bills in one place
Create a designated spot for paper bills so that you know exactly where your bills are located every month.
Make sure to keep the spot in a prominent location, like on your refrigerator or in a basket on your kitchen counter.
Doing this will make it easier to access your bills when you need them and serve as a reminder to make the payments when they’re due.
Sort according to the due date
To make sure your bills are paid on time, take the time to sort your bills by their due date as they’re stored.
You can even make things easier on yourself by writing the due date in the corner of the bill in a bright colour to make it easy to see.
When a new bill comes in, file it into the stack based on its due date so you can easily keep track of when each payment is due.
Keep your inbox clear
Making sure your online bill notifications are organized is another task you need to tackle to ensure you stay on top of your payments.
And if your inbox is overflowing, it’s going to be much more difficult to keep your online bills organized.
Make an effort to sort through your email every day, delete all the junk mail, and organize important messages into relevant folders.
Create a bill folder in your inbox
Make a folder in your email inbox, especially for bills.
When a bill comes through email, open it to check that the amount is correct, then transfer it to your bill folder.
Once you have your bills sorted into a folder, you can easily access the messages without having to dig through your inbox to find them.
How to Keep Track of Irregular Bills
While most bills come in the mail once per month, you likely have other irregular bills that require irregular payments.
Since these bills are often bi-annual or annual payments, they can easily slip through the cracks if you’re not organized.
Irregular bills may not be paid on a monthly basis, but they’re often essential payments that have to be made every year, like:
- Property taxes
- Home insurance
- Healthcare expenses
- Vehicle insurance and registration
- Car maintenance
- Veterinarian bills
- Life insurance
- Estimated tax payments (if you’re self-employed)
Since these bills are often bi-annual or annual payments, they can easily slip through the cracks if you’re not organized.
And if you don’t plan for them, these expenses can easily sneak up on you and force you to scramble to find the money in your budget to pay them.
That’s why it’s essential to come up with a system for keeping track of irregular bills.
Follow these steps to create a system for staying organized when it comes to paying bi-annual or annual bills.
Make a list of irregular bills
Start by looking through last year’s bank statements or budget to see which bills you have to pay on an irregular basis.
As you find them, write down the name of the bill, the amount you paid last year, the due date, and the method you used to pay the bill.
Keep a running tally of all the bills on a piece of paper or in a spreadsheet so that you can factor it into your monthly budget.
Create a sinking funding expense category for each item
Sinking funds were a concept created by Dave Ramsey, and they help you save up for large expenses so that they don’t sneak up on you.
All you need to do is figure out how much money you need to set aside each month to pay these irregular bills and factor it into your budget.
This amount should always be left untouched in your bank account, or you can create separate accounts for your sinking funds if you’re worried about overspending.
Organize the bills on your budget calendar
Finally, take a minute to add the bill’s due dates to your calendar, reminders app, or whatever tool you’re using for the rest of your bill reminders.
In addition to including the name of the bill on the due date, it’s also a good idea to write down the approximate amount you’ll owe on that day.
Bonus Bill Tracking Tips
Even if you have all these tools in your toolbox, staying on top of your bills can sometimes be difficult.
That’s why it’s a good idea to have some tricks in your back pocket to help you stay organized from month to month.
Create a bill payment email
With everyone asking for your email these days, it’s easy for your inbox to get cluttered with junk mail, which means important bills can easily get lost.
To keep this from happening, set up a new email address that is dedicated to your bills.
Add the new address to each of your payment accounts, but don’t use it for anything else.
Doing this ensures you’ll only receive messages about upcoming bills, making it simple to see what you need to pay without all that extra clutter.
Set up automatic payments
With the help of automatic payments, you’ll never miss a due date.
While this is a great method to help you stay on top of your bills, it also means you need to stay on top of your finances.
When your bills are automatically drafted out of your checking account, you run the risk of over-drafting if you don’t keep enough money in your account.
That means auto payments are only a good idea if you’re diligent about making sure your checking account has enough money to cover all your monthly payments.
Use your checking account for automatic payments
If one of your payment companies doesn’t offer automatic payments, set up automatic bill pay through your checking account instead.
Use your bank’s auto-pay option to provide them with details about the bill issuer.
Then, the bank will send money to them each month.
Depending on the payee’s preferred method, the bank will either process an electronic payment or mail a paper check.
Schedule a time to pay bills
It can also be beneficial to set aside time every week to pay your bills, track your expenses, and check your budget.
I recommend blocking this time off in your calendar so it’s never missed and then taking the time to review your bank account, sort through the bills that need to be paid that week, and contact the biller regarding questions or discrepancies, if needed.
Create a file for your records
After your bills are paid, it’s a good idea to keep a copy of the bill for your records.
Doing this will help you keep track of your spending from month to month and allow you to compare current payments to past payments to note any changes.
There are a couple of different filing methods you could use to help sort your past bills:
- By month: File all your bills for the month together in one folder or envelope to keep all your monthly records together in one spot.
- By bill: Organize your bills by the payee to help keep a record of monthly bills according to the issuer. Create a different file folder for each bill, then sort the bills into those folders after they’re paid.
- Tax documents: In addition to organizing your past bills for your records, you may also need to store certain bills for tax purposes. If you have bills that need to be set aside for taxes, make a copy of the bill and add it to your tax documents folder, then file the original bill according to your filing method of choice.
Related Ideas for Bill Tracking:
- How to Budget for Beginners: A Step-by-Step Guide to Budgeting
- A Comprehensive List of Budget Categories and Subcategories
- Best Budget Planner Books
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