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Beginner's Journey: Tracking Expenditures

Updated: Jul 16

Ever been to Daiso thinking that every item is only just $2, and you end up checking out with 10 packs of stickers, some nice fluffy socks and Japanese snacks before you realise that it’s $30 already?! As insignificant as the value of each item may seem, when these minute transactions pile-up, it results in overspending.



What is financial literacy?

Firstly, to be financial literate means that we understand and practise healthy financial management skills. Our economy is driven by consumerism which promotes the interest of consumers to buy more things. This can lead to us to spending beyond our means. Therefore, in this day and age where buying something is just a click away, it is important for us to know about how to manage our finances.


Read more: What is financial literacy?


Welcome to our Beginner's Journey series where we introduce the basics that one should know about financial literacy in three different pillars. The first pillar we are introducing is Tracking Expenditures.


Why is tracking our expenditure a key in financial literacy?

Tracking of expenditures is the act of recording expenses and bills incurred over a period of time. So why is tracking expenditures important to be financially literate?


To be proficient in a skill, it is important to be aware of your capabilities and tune them to improve on it. Likewise, to be financially literate, the first step is to understand the inflow and outflow of our personal finances then will you be more well-informed to adjust your expenditure accordingly.


How do I effectively track expenditures?

Tracking expenses is not an easy task. It involves committing to the act of recording each transaction down, and recalling what was bought and how much was spent. With transactions going digital now, it is easier to trace and account for our past activity.


1. Record your transactions in a timely manner

Note all of your expenses down. This can be done via many methods, such as the traditional pen and paper, spreadsheets and mobile expense tracking applications such as Seedly, Monny and Expensify . Try and experiment with the various methods to see what is most comfortable and easy for you to use. Do your expense calculation after a period of time (e.g. at the end of day or month) and tabulate them at the end. We promise that this is the satisfying part when you diligently account for yourself!



This is a task that requires commitment. Therefore, develop the habit to either record your spendings immediately after or collate them after an entire day. It is best to not delay for too long as you may lose track of the receipts and details of the transactions.


Tracking expenses is so difficult!


It is not easy! But, better late than never. Here you are, that is still a step forward!


For starters, tracking expenses for a smaller project or time period can be helpful. An example is that of tracking expenses for an overseas trip. By slowly becoming accustomed to such practices, it will then be easier to make it a habit.


Another way is to leverage on others to do the hard work. Gather your spendings on one multi-purpose card that you use for most of your transactions. Wait for the end of the month when your bill arrives to go through the transactions and note down their category as well as the amount. This is easier but less realistic as there are other forms of expenses that may be incurred by other cards or even cash that cannot be tracked properly However, this is still a means to an end.


2. Understanding your personal behaviour

After a period of tracking, give yourself some time to sit and revisit your expenses. Understanding the avenues where you receive and spend money will be helpful for you to portion your money in the future. From your spendings, you can check if you have been overspending or underspending in certain areas. Following that, try distinguishing between what is needed and what is wanted.


Is there a need to get 10 packs of Daiso stickers? I will reconsider that!


The way you spend is a reflection of your values and lifestyle. When you start being conscious of your behaviours, it gives you an insight into how you plan to spend your life. Is this something in line with your goals? Once enlightened, reset and start your next expenses cycle again.


3. Prepare your budget



After understanding how you spend, the next step is to prepare for your budget. Note where you are overspending or understanding, and allocate a reasonable portion of your money stream to different needs. It's important to find your balance. Don't be pressured by "benchmarks". If you have not read our previous article on the importance of understanding your financial situation, do head over to check it out.

Tracking expenses is one of the first steps of becoming personally financially literate as it forces you to take your finances into your own hands. With better awareness of your own habits, it gives you clarity and confidence for your future spending. Apart from expenses, remember to set aside some money for rainy days and emergencies. Life is very unexpected as we have experienced so far! Therefore, help yourself gain some control by cleaning up your finances.


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