12 steps to financial wellness – Step 1: How to Track Your Spending

Are you ready to join us on a journey toward financial wellness?

Each month in 2025, we will focus on one step of a journey toward financial wellness. We’ll tackle the topic in detail and help you learn all you need to know about that step. Follow along, and at the end of the year, you’ll have mastered the tools for a life of financial wellness.

It’s January. It’s the first of the year. It’s a time of resolutions and changes and goal-setting and personal growth. If you are going to change anything this year, let it be your finances. Getting ‘financially fit’ will impact every area of your life. Maybe it will help you afford that gym membership or purchase a home gym. Maybe it will let you take that dream vacation with your significant other or family. Maybe it will let your mind rest and not worry over bills and how they are going to all get paid. Start this year off choosing your financial goals as a top priority. With all that being said, lets start with Step 1.

Tracking your spending is the first step toward greater financial awareness and, ultimately, toward financial health. However, mastering this skill is easier said than done. How can you track every dollar you spend when you make multiple purchases each day?

I’ve outlined how to track your spending in 3 easy steps.

1. Choose your tools

Tracing every dollar’s journey isn’t easy, but with the right tools, you can make it organized. Choose from one of the following money-tracking techniques:

• Personal Financial Management Apps – If your life happens on your phone, you can download a budgeting app like YNAB to help you track your spending. The app allows 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 not free but may be worth the price for users who want to take on a more active role in their money management. For a free experience, check out the Money Management by MX feature in your ATFCU digital banking platforms. It’s integrated into your spending at ATFCU and you can add external accounts as well. The program allows you to set goals, create budgets, and track your spending from the comfort of your home or wherever you are. Money Management is a powerful tool and can help you immensely.
• Spreadsheet – Maybe you prefer to see everything spelled out clearly on a single page. If so, a spreadsheet might be a better choice. 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.
• The envelope system. If much of your purchasing is done using cash, consider withdrawing the cash you think you’ll spend in a month (or in a week) and keeping it in envelopes designated for each category. When you need to make a purchase, just use money from the envelope. I tend to do this but digitally. My husband and I I have 10 savings accounts and 3 checking accounts, and each has a specific name. Here are some of the categories we use: emergency savings, Christmas, giving, eating out, vehicle fund, and a savings account for our kids’ activities. I have direct transfers set up from our paychecks, so we are always saving. Then when I need to buy Christmas gifts I just transfer the money from that savings to my checking account. Or when I have to go to one of the boys soccer games or purchase new cleats, I take the money from the activity savings. I personally don’t like carrying cash because I always forget what I spent it on or it disappears…🤔. You can decide which system works best for you, cash or digital ‘envelopes’.
• Receipts. Hold onto every receipt from the purchases you make this month to help you track your spending.
• Pencil and paper. Recording each purchase the old-fashioned way can help you make more mindful money choices throughout the day. Be sure to keep a steady supply of both writing instruments handy at all times so you never miss a purchase. My mom still keeps a check register. Do y’all even know what that is? I know my kids don’t. If you do, the credit union has them available in our lobbies if you need a new one to keep track of your spending and running balance.

2. Review your checking account and credit card statements carefully

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 the month.  ATFCU monthly statements are available as eStatements or can be mailed to your home.  You probably have similar options with your credit cards.

3. Review and 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 your purchases to find the total amount of money spent should be relatively simple. The app or spreadsheet may have already helped you divide the money spent into separate categories. Similarly, if you’ve used the envelope system, you should know how much you spent on each category. However, if you’ve chosen another method to track your spending, you may 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 and insurance premiums. Another great feature of Money Management by MX is that it shows you all your subscriptions in a tab. It shows when they are due or get deducted from you account and makes it easier to not forget.

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.