Living within your means requires understanding how much money you have coming in, and how much you have going out. Some people choose to do their expense tracking in a spreadsheet, or use cash envelopes to budget for every expense category.
Although both of those methods can work, they require you to spend a lot of time manually keeping track of every single purchase. And anything that requires a lot of effort is less likely to be sustainable—especially when the ‘newness’ of budgeting wears off and it stops being fun.
Using an expense tracker app—or even better, an expense tracking tool within your bank account—can do a lot of this manual work for you, so you can focus your efforts on the big-picture stuff: Like how to earn or save more money, pay off your debt faster, or reduce your expenses in certain categories.
Here are four tips to help you save more money simply by tracking your expenses with Simple.
1. Organize your expenses into specific, useful categories based on your past purchases.
If you’re planning on tracking all your expenses manually, then you’ll probably want to keep your system fairly simple. Most people will write down a few broad expense categories: Rent/mortgage, food, utilities, transportation, pets, childcare, etc. and then work to fit each of their purchases into one of those categories.
The problem with broad categories is that without getting specific in your budget, it’s hard to really get a sense of where your money is going. For example, if you include everything from groceries, to dining out with friends, to date nights, to trips to the liquor store into one ‘Food’ category, then at the end of the month, if you run out of funds, it’ll require additional effort to figure out why. Was it grocery costs? Or those overpriced drinks at the bar? Or maybe the to-go lunches on work days? Or your afternoon americanos from the coffeeshop?
While having too many expense categories can get overwhelming, getting specific enough with your categories to make them useful is a good goal to have. When you use Expenses, you can create as many-or as few-categories as makes sense for you.
For example, in your Simple Account, it just takes a few clicks to turn that ‘Food’ expense category into a few, more specific Expenses:
- Dining Out
By getting a little more specific with your expense categories, at the end of the month, you’ll be able to analyze your spending habits without having to do a bunch of additional math. For example, you’ll be able to see that your grocery bills are actually fairly consistent and reasonable—but your spending on alcohol could use some work. This will help you see exactly where you have an opportunity to reduce your expenses.
Take a look at your recent transactions in your Simple Account and jot down any expense categories that might be useful to track. Remember, the more specific you are, the more accurate your budget will be (but don’t create more categories than you can keep track of)!
2. Use Expenses to set budgets for specific expense categories.
Expenses are like digital envelopes for your money. You can use Expenses to keep track of any and all of your expenses, including monthly bills, variable expenses, and debt payments. Just like cash envelopes are used to budget for specific categories, you can use Expenses to set aside the money you need for anything and everything.
Once you have an understanding of what expense categories you want to include in your budget, you can set up Expenses in your Simple Account to start budgeting for them! Using Expenses for all of your main expense categories can help you gain an understanding of what is actually Safe-to-Spend in your account.
Be sure to create Expenses for any debts you’re paying off too! Setting aside money each month for paying off your student loans, car loan, or credit card debt will help you stay on track on your path toward becoming debt-free.
Hint: If the Expenses you’re creating are aspirational (saving for a bike, putting money away for vacation, etc.), it might be better suited for a Goal!
3. Set up Funding Schedules for each of your Expenses.
When you create an Expense in your Simple Account, you will be asked a few questions, including how often you’d like to contribute to (i.e., fund) your Expenses. We recommend lining up your Expenses with when you get paid, so that the money you need for bills is automatically funneled into your Expenses, removing any temptation to spend it. (If you don’t already have direct deposit set up in your Simple Account, here’s how to get that set up.)
If you have money left over after your Expenses are funded, then you’ll see it in your Safe-to-Spend—and you can feel confident that it is actually safe to spend!
4. Use auto-spend to make it easier to keep your Expenses organized.
Of course, a budget is only useful if it’s accurate—which is why we recommend automating as much of it as possible. One way to do this is to set up your Expenses to automatically categorize certain purchases for you.
In Simple, each transaction is assigned to a category based on the merchant. For example, any purchase made at the grocery store Trader Joe’s is automatically assigned the category ‘Groceries.’ If you have an Expense named ‘Groceries’, and you buy some groceries at Trader Joe’s, we’ll automatically spend that amount from your ‘Groceries’ Expense, instead of your Safe-to-Spend.
Here are the categories we’ll attach automatically:
- Car/auto/vehicle insurance
- School/student loans
For other Expenses not on this list, you’ll need to select which types of transactions you want to include. You can do this by tapping on each of your Expenses to bring up the details page, then tapping “Money out” and selecting which transaction categories you want to spend from that Expense.
For example, if you want to track your pet’s medical expenses separately from their food and treats, then you might create a ‘Fido’s Medical Expenses’ Expense (and select ‘Pet Medicine’ and ‘Veterinarian’ as the transaction categories) and then a ‘Fido’s Food and Treats’ Expense (with ‘Pet Food’ and ‘Pet Supplies’ as the transaction categories).
You can also assign specific merchants to specific transaction categories so that they are automatically organized the way you want them. For example, by default, online retailer Amazon is categorized as ‘Books’—but if you only use your Amazon account to buy household supplies, then you might want to change its transaction category to ‘Home Supplies.’ To do this, just click on a recent transaction from that merchant, and tap the merchant’s name to update its settings in your Simple Account.
Make Budget Tracking Easier with Simple
Keeping track of your expenses and income is an important step towards financial freedom—but that doesn’t mean you have to spend all your time on money management! You could try out a separate budget app—but if you’re banking with Simple, make the most of your account by using the easy-to-navigate budgeting tools that are already built into your account.
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