How to Track Personal Finances

Tracking your personal finances successfully requires a method of organization that works for you, and this will offer one possible solution. The idea is to keep all finance related information in one place, as well as offer a simple method to keep track of running balances even on those debts that don't have official bills (such as a loan from your parents).

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Bill binder from section one
• Incoming bills
• Pen
• Calculator

Get Organized

1. Put enough dividers into your binder to have one section for each bill you pay, plus two extras in the front. You can label these dividers with the name of the creditor and put them in your chosen order (alphabetical, largest to smallest balance, smallest to largest balance, due date, etc.).

2. Create your tracking chart and print copies for each bill. This is best done in Excel or some other spreadsheet software program and will look similar to the sections of a check register. At the top of the page, include lines for the creditor's name, address, telephone number, Web site, interest rates or any other relevant information. You may also want to include a place for your account number. The rest of the chart should include the following columns: date, activity, debit (or charge), credit (or payment) and balance.

3. Create a monthly summary chart and print 12 copies. These will go in one of the front sections of your binder and should include a line at the top for the month as well as the following columns: billing date, creditor's name, minimum due, due date and total due.

4. Create an overall spending chart and print 12 copies. This step is optional, but will help you find places to save more money or discover where you are overspending. This should look very similar to the bill tracking chart, and it should go in the other front section of the binder. You'll use this spending chart to track all those expenses that aren't bills (groceries, gas, fast food, gambling, etc.)

Keep Track

5. Sort and record all your bills as they come in. With each bill, fill out both the monthly summary and the appropriate bill chart. The monthly summary will keep track of all current payments due, while the bill chart will allow you to see the balance going up or down and determine if or when you need to make a larger payment.

6. Pay the bills according to the monthly summary and record payments in the bill chart as a credit or payment. You could punch holes in the bill and file it behind the tracking chart if you don't already have a file elsewhere.

7. Record all other expenditures and income in your overall spending chart, calculating your remaining balance after each debit or credit.

Tips & Warnings

• If you choose to keep the bills in your binder, make sure your binder is large enough to hold at least six months of each bill. After six months or one year, remove the old bills and file them away, making room for new bills. Each time you empty the binder, pull the oldest papers out of your files and shred anything more than one year old.
• If you include the account number on your form, be aware that it will need to be treated carefully, just like the card it came from.

Resources

• Here is a check register template to get you started.