One of the most common struggles I hear from people, including my past self, is putting together a budget. If you’ve ever asked yourself, “Can I afford to buy a house?” or simply wondered where your money is going each month, you’re not alone.
When working with clients—especially those starting their home-buying journey—I always recommend one simple but powerful step: track your spending. It may sound overwhelming, but there’s a straightforward way to do it, and I have to give credit where credit is due.
My wife and I adopted this strategy after listening to a podcast by Mindy Jensen from BiggerPockets, and I can tell you firsthand—it works. Not only does it give you confidence in your finances, but after just a few weeks, you’ll notice your spending behavior shifting in a way that helps you focus on long-term financial goals rather than immediate gratification.
Why Traditional Budgeting Doesn’t Work for Everyone
Like many people, I’ve tried countless times to set up a budget by listing projected expenses—groceries, mortgage, dining out, entertainment. But at the end of the month, despite my best intentions, I’d find myself overspending in most categories. Sound familiar?
That’s because traditional budgeting methods often rely on projections rather than real-time awareness. If you’re primarily using digital payments—credit cards, Venmo, auto-pay—you may not even feel the impact of your spending until it’s too late.
A Smarter Way to Track Spending
One of the key insights from the book Profit First is that because most of us don’t interact with physical cash anymore, we lose track of what we’re actually spending. In the past, opening a wallet and seeing cash (or the lack of it) gave an immediate reality check. Now, with most transactions happening digitally, it’s easy to assume everything is fine—until those pending charges hit and suddenly the budget doesn’t look so great.
This is why I strongly recommend tracking expenses on paper, not just digitally.
The Strategy: A Simple, One-Month Commitment
Here’s how to implement this game-changing strategy:
- Download the Expense Tracking Sheet.
- Click the link below to access a free printable sheet.
- Modify it to include your fixed monthly expenses.
- LINK TO EXPENSE TRACKING SHEET
- Front-Load Fixed Expenses.
- Start by listing all essential expenses that happen every month: rent/mortgage, cell phone, internet, car payment, subscriptions, savings contributions, etc.
- This will show you exactly how much of your income is already allocated before discretionary spending even starts.
- Manually Log Every Expense.
- Commit to tracking every purchase, no matter how small. Keep a printed sheet near your front door and write down every transaction when you get home.
- Key columns to track: Date, Description, Amount, Running Total.
- This method makes spending more intentional—you’ll think twice before making unnecessary purchases.
- Review Weekly and Adjust.
- After a few weeks, patterns will emerge. You’ll see where your money is going and where you can cut back.
- You’ll also feel the “pain” of logging unnecessary purchases, which can naturally curb impulse spending.
The Eye-Opening Effect of Tracking Expenses
When my wife and I first did this, we were shocked to realize that two-thirds to three-quarters of our income was already committed before discretionary spending even began. Despite both earning six figures, we had very little wiggle room.
This realization completely shifted our mindset. We started prioritizing savings, cutting back on impulse buys, and becoming more strategic about where our money was going.
Small Changes, Big Impact
One of my personal struggles was impulse-buying books after hearing about them on a podcast. My old habit was to immediately order them on Amazon. After implementing this tracking strategy, I created a new rule: instead of buying right away, I’d add the book to a wish list. Then, I’d check Libby (a free library app) or LibriVox (a free audiobook platform) to see if I could access it for free.
This small shift saved me hundreds of dollars per year while still allowing me to enjoy my love for reading.
Your Challenge: Try It for One Month
This method is not about creating a restrictive budget—it’s about understanding your spending habits and making more informed choices.
If you’ve ever felt like your money disappears before you can account for it, this strategy will change the game for you.
Give it a try for just one month. If you find value in it, extend it to two or three months. The key is to build awareness and intentionality around your finances.
Download the tracking sheet below and start today. I’d love to hear how it works for you—drop a comment below if you try it out!
LINK TO EXPENSE TRACKING SHEET
This simple approach transformed how I handle my money, and I’m confident it can do the same for you. If you have any questions, let me know in the comments. Happy budgeting!