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Provides an objective view of your finances

Helps you live within your income

Enables you to chart your financial future
1.
Get a receipt for all expenditures
2.
If you don’t have one, create one by writing
the amount spent, for what, and to whom
3.
Label the receipts by expense categories from
your spending plan
4.
Regularly record amounts and compare them
with the planned amounts in spending plan
5.
For this method to work, all family members
must follow this procedure
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Easy to sort
Simple to total
Serve as proof of purchase
Important for tax purposes

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Write in income whenever you receive it
Write in when bills and expenses are due
As you pay each bill, cross it off
Advantage
May be used to plan for larger irregular expenses
that don’t occur every month, such as insurance
payments, property taxes, or holiday gifts

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Set aside money for various expenses in
separate envelopes on a regular schedule,
using expense categories from your spending
plan
Label envelopes with a specific purpose such
as GAS or GROCERIES and the amount
budgeted for each expense

When you receive income, put the proper amount in each
envelope

When the time comes, take the money for the expense
category and note the date and amount spent on that
envelope

At the end of a month or pay period, transfer any money
left into a savings or emergency fund account

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Works well for tracking and controlling expenses
purchased with cash
Simple, with far less recording or paperwork compared
with other methods

Income conveniently divided to cover all anticipated
expenses

Easy to see how much money is available to spend

May be too tempting to “borrow” money day-to-day or if a
shortage occurs

Having cash readily available may encourage careless
spending

Risky to keep a lot of cash at home

Combines checks and/or specially designated savings
accounts

Checks are used for larger fixed expenses, such as rent or
mortgage payments, car payments, and utilities

Envelope method used for cash expenses, such as food,
household expenses, and transportation

Paying by check for most expenses, recording transactions
immediately, and keeping an up-to-date balance

Record what each check is for, where it was spent, and the
amount

Balance the checkbook regularly and compare it with the
monthly statement from your financial institution for accuracy

On a regular basis, total the expenses recorded in your
check register by expense categories and compare the
totals with your spending plan

Total amounts can be recorded in a binder or notebook to
complete the picture of where your money is going

Provides valuable information about your spending patterns

Provides proof of payment

Two people owning a joint checking account can write
checks from one checkbook

Possible bank charges that add to your cost, such as fees
for a low balance, for each check written, or ATM card and
debit card fees

Joint checking accounts can result in problems if there is no
coordination. Checks may not be recorded and or the
checkbook may not be balanced

Keep a daily log of expenses in an account book that you
can create or you can buy an account book

Across the top, write in columns for each expense category
from spending plan, possibly including the amount budgeted

As you spend money or pay bills, record expenditures in the
appropriate column

On a regular basis (weekly, monthly, etc.), add all of the
entries for each category to determine how much you spent

Or you may subtract each entry from the amount budgeted
in each category to determine how much you have left to
spend

Each category can be compared to spending plan to see if
goals are being met

Advantage - provides a more accurate, up-to-date picture of
your financial situation

Disadvantage – everyone in the family must be diligent in
recording expenses almost daily for records to be accurate
and up-to-date

You can create your own expense sheets and tracking
system by using a basic computer spreadsheet program

You also have the option of purchasing a commercial
software program designed specifically for personal finance

Check with these companies to determine what program
may be right for you

These programs usually print checks

Balance checking account

Identify tax deductions

Provide graphs to help you analyze your financial situation

Keep records simple

Avoid unnecessary detail

Appoint one person in the household to record family
expenditures

Set a regular time for record-keeping

Getting behind can make it a challenge to catch up

Analyze Expenditures Regularly

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Are all expenditures listed?
Are all financial obligations being met?
Is spending within your income?
Are you satisfied with how your money is being
used?
Are you satisfied with the amount being saved?