Holes in your Wallet? How to Start Tracking, Cut Expenses, and Save Money

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“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.” – Charles Dickens

Can you save a sinking ship if you don’t know where the leak is? Can you save money if you don’t know how it all disappears? One of the best and simplest ways to cut expenses is to record where your money goes and THEN reduce wasteful spending. After that, compare your expenses with your income and slowly lower it until you make far more than what you spend.

Personally, I’ve found that a simpler version of Vicki Robin and Joe Dominguez’ technique from “Your Money or Your Life” works best, and I’ll show you how to use it here.

*By the way, you can either create your own file, or you can use the free template that I’ll share with you later. I’ve personally used it since 2009.

Holes in your Wallet? How to Start Tracking, Cut Expenses, and Save Money - Your Wealthy Mind


First: How does recording your expenses save money?


  1. You’ll know where you waste money.

By tracking your expenses to the nearest cent (USD) or peso (PHP), you’ll see where your money goes every month and where it’s being wasted. (Ex. If HALF your income goes to “clothes” or “credit card” every month you better check those out).

  1. You’ll save more money.

If you knew you’d have to take a few seconds to record that candy bar or whatever small purchase in your expense tracker, you’d likely want to skip buying it. That added inconvenience will stop a lot of impulse purchases and save you money.

  1. You’ll be more motivated to fix your finances.

Track your expenses AND INCOME Every month and graph them. When you see that expense line going down to below your income line, you’ll be even MORE motivated to save even more (and if you see that you’re suddenly spending too much, you’ll limit yourself so that your expenses do not increase beyond your income).

magnifier page letters newspaper

To start tracking, you’ll need:
  1. A Google Sheets Account. (You can easily register for one if you have a Gmail account).
  2. Google Sheets App* on your smartphone (iStore / Play Store).
  3. A file where you categorize expenses for the month (I have a sample for you later.)
  4. A file where you graph your expenses against your income. (Your goal is to cut expenses until your income is MUCH higher.)

*Note: You can also use MS Excel (paid program) or Openoffice (FREE program), but I’ve switched to Google Sheets as it’s free and has an online backup.


Set up your Expense Categories:

Create a sheet for the month (e.g. September 20XX) and setup your expense categories*. You can add more or remove some depending on your needs. These are some of the ones I use:

  1. Food – Food expenses by you and your family.
  2. Transportation – Gas, parking, commute, etc.
  3. Utilities – Electricity, water, internet, repairs, mortgage, credit card payments, etc. (I have a subcategory here for toiletries and other non-food expenses.)
  4. Clothing – Work clothes, accessories, jewelry, etc.
  5. Health – Doctor’s bills, medicine, health food (tea, etc.), supplements, etc.
  6. Education – Books, seminars, etc.
  7. Entertainment – Movies, video games, partying with friends, etc.
  8. Family – Christmas and Birthday presents, financial support, allowance for kids, etc.
  9. Donations – Charity donations.
  10. Business – Business expenses paid from your own pocket.
  11. Unclassified/Others
  12. Income – Salary, allowances, cash gifts received, etc.

*Note: You can download a FREE template later.


How to Record Expenses:

1. Every time you buy something, record how much you spent on your file. That’s it! If you can’t access your file at that moment, just write what you’ve spent on a piece of paper (that’s what I do most of the time. Once you get the habit, it’s as easy as walking.)

recording expenses paper pen eating

2. Every month, review your expenses and see where most of your money went. Ask yourself: Are there things that I’m wasting too much money on? What expenses can I reduce? Are there ways to increase my income?

expense tracker expense tracker totals

3. Graph your Expenses against your Income. (Google Sheets has an “Insert Chart” tool which can create a line graph for your income and expense data. You can also use the template we have.)

expense tracker graph

Note: You don’t need to feel guilty if your expenses exceed your income at first or if it occasionally spikes on months where serious emergencies happen. It happens to everyone (myself included). It’s a part of life, and your goal is to keep expenses as far below your income as often as possible.

full income and expense graph

This is my full chart. Remember how I quit my job last February 2016 to start blogging/writing full time? That’s why I will, temporarily, have months of zero income (well, except for the occasional passive income).

Continue with this program and eventually, you will be able to cut expenses simply because you know what your top money-wasters are. Keep expenses low, your income high, and use the money you saved to invest and earn more money!

saving jar money pixabay


If you want to learn how to invest the money you saved, these are a few articles you might want to read:

What are Stocks and Why should you Invest in them?

15 Minutes for Your Future: How to Budget and Invest for Wealth Creation

How to Invest in Stocks: 10 Things Beginners NEED to Know

By the way, for your FREE Expense Tracker Template and FREE Graph Template, just enter your email below and we’ll send it there!

The “Tracker Template” (one Simple version, and another with subcategories) automatically calculates the totals that you need on the second sheet, and you can easily copy the numbers over to the “Income vs Expense Graph.” By the way, just upload those .xlsx files to your Google Sheets Account and you can open/edit them from there.

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About Ray

Ray is the head writer behind and is a proponent of improving the world using excellent ideas and self-education. He believes that anyone can achieve their goals once they learn how, and he considers it his mission to enrich lives and end poverty by teaching people the lessons they need to succeed.

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