Saturday, September 23, 2006

Track Your Spending ... Simply

If you had to narrow your spending categories down to only ten (for after-tax spending and expenses), what would they be?

The question occurred to me a few days ago as I was helping a reader set up her Check Register spreadsheet. She is an absolute beginner to the task of tracking expenses. So the idea of creating spending categories was a bit daunting.

Part of the problem was that I'd emailed her a copy of my own Category List from Quicken, just so she'd get the idea. It gave her the idea, all right — the idea that categorizing one's spending is a nightmare of epic proportions.

Well, it really isn't, and I didn't intend it to look that way.

The problem is that my Quicken Category List is extensive. It's super-long, having been constructed over the course of more than nine years. It's chock full of categories, subcategories, sub-subcategories, and sub-sub-subcategories. Some of these have been used maybe once or twice, tops, in the last several years. But they're all there, nonetheless, and they tell me what I want to know.

However, when someone who isn't me finds spending categories like "Food - Dining" not exactly delineating themselves from "Entertainment - Dining," and "Household" seeming a whole lot like "House - Miscellaneous," well, things can get muddy.

Glimpsing that whole mess had to make Dear Reader / Spreadsheet User question the reward — nay, the sanity — of it all. What Budgeting Newbie could get a good, honest start in Spending Control 101 with something as nasty as THAT staring straight at them?

Here I was, a huge advocate of Keep It Simple, Stupid (KISS) methodology, and my own spending Category List looked pretty much like a chapter from War and Peace.

If you're just starting to track your spending, looking to get some starter spending categories in place, then War and Peace is most assuredly NOT the idea.

A Spending Category Beginning

I don't remember where I started with my own spending categories, obviously. It was just too long ago. My life has changed too much since then, anyway. So I set about throwing together a usable list of starter categories, as it were.

The idea is to cover the basics, to give someone new to this game a place to start. Obviously there are zillions of things we could spend our after-tax earnings on, but I like these categories as a starting point:

Now, if you were looking for something that's more detailed and extensive, you might wish to see this longer Excel list of spending categories. It's from Mary Hunt's book, the Cheapskate Monthly Money Makeover.

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— Posted by Michael @ 10:58 AM


I now that it makes sense to track your expenses and break them down into categories. The problem is that is seems like hard work. If you are disciplined then you will probably learn a great deal about your spending and really be able to make a difference. So go for it - don't let me talk you out of it. But if you are not so disciplined, then I prefer to simply set aside an amount to be saved out of every pay period and have that amount automatically transferred to a savings account. Then the rest I can spend without worrying about categories.


Categories can be overwhelming, I agree. I like your list, but I think it helps, in Quicken or wherever you keep your list, to describe exactly what is included in some of the more ambiguous categories. For example - where do you include household cleaning supplies? What about things like shampoo, haircuts, renting a movie? Having a go-to list keeps you from second-guessing yourself when you're categorizing purchases, and the simpler the process, the more likely you'll be to stick with it.

After you get a handle on the big categories, then you can start breaking things down into smaller categories, in order to get more information about your spending.


You have a lot of categories that are relatively fixed month to month (insurance, housing) that I usually put together into one category, since they won't change month to month.


I tried for a month and didn't like result . It is amazing how much I spend on things I dont need, up to 30%. wow!

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Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


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