10 Reasons to Keep Track of Every Purchase you Make

It has been a while since I’ve written a post about finances, so am diving back in with something I’m passionate about doing: I keep track of every purchase I make. Doing this is one of the things that helped change my financial habits and helped me gain control of my finances, but often people react negatively to the idea. Because of that, I want to share 10 reasons to keep track of every purchase.

Looking Closely at our Finances

A number of years ago I was in a financially abusive relationship which left me in a pretty poor financial state once I got out. Rebuilding my life and regaining control of my finances after that relationship is one of the reasons I’m so passionate about financial literacy. Had I known then what I know now, I may have been able to make different choices.

Previously I spent a year on our blog following Gail Vaz-Oxlade’s Money Master Class that she hosted on Twitter (now X). It was a weekly dose of financial information and tasks to complete. If you’d like to take a look at it, I put all of the weekly posts in one place: Money Master Class: A Year of Financial Guidance.

If you’re wondering what on earth finances have to do with living sustainably, I’ve jotted down some thoughts on that too: What do finances have to do with living life sustainably? I’m passionate about finances on a personal level, but I think it’s important on a broader level too.

Why to Keep Track of Every Purchase

I love talking about budgets and finances. When people ask how to make a budget I’ll often suggest that they first keep track of every purchase they make. I usually lose people’s enthusiasm at that point because, at first thought, it seems like a lot of work.

While there is certainly a little bit of effort involved, I feel that the payoff is worth it. And, once a habit is formed, it really isn’t that much extra effort.

When I keep track of my purchases, I keep every receipt (or make a note in my phone if receipts aren’t an option) and then I write each expense down in my ledger.

Here are 10 reasons why I think it’s beneficial to keep track of every purchase you make:

1. Have an accurate view of your spending instead of a guess

If you’ve ever wondered how much money you were spending, the only way to get an accurate picture is to keep track of where the money goes.

Some people like to simply rely on bank or card statements, which do give decent idea of spending, but it’s easy to lose track of things such as cash or loyalty points redemptions which help to give a more accurate picture.

2. Truly know where your money goes and how much you spend in each category

The benefit of tracking your spending by keeping receipts and writing your purchases down is that it gives you a detailed picture of your spending by category.

You can tell if your Walmart bill is for groceries or for toiletries or medicine. Where a credit card statement might have a weird company name, you can know it is for a vintage clothing purchase or a coffee date.

3. Be able to make an accurate budget

Knowing that detailed picture of where your money goes will help you create an accurate and realistic budget. A budget will only be effective if it is realistic. If you spend $200 per month regularly on eating out, budgeting $25 is only setting yourself up for failure.

4. Be able to make clearer financial choices and be able to take from one pot to supplement another in your budget

Seeing the patterns of spending that occur after keeping track of every purchase allows for clearer financial decisions to be made. These can be on a larger scale or on a smaller scale, such as choosing to use some grocery money to supplement your gift budget for the month.

5. Ensure you’re paying your bills fully

Keeping track of every purchase also means keeping track of every bill since these are basically purchases of services. By keeping track and writing things down you can have that extra check that you are paying your bills fully and on time.

6. Motivate yourself to achieve your goals and/or save more

Seeing where your money goes can help motivate you to alter your spending to achieve your goals. Seeing how much money is going towards eating out or entertainment or gifts can give you a better picture of what changes you want to make.

7. Personal accountability–you will likely spend less when you see what you’re spending

Having to write down every purchase I make is a little personal accountability moment each time. I find seeing the tally of how much I’ve spent in a month makes me pause and think harder about the necessity of my next purchase.

8. Know if you’ve been overcharged

One sure way to know if you’ve been overcharged for something is to collect the receipt and reconcile your statements. I cannot count the number of times I’ve been overcharged at the grocery store and it all adds up!

9. Have a record of your transactions and when you made a particular purchase

Sometimes I want or need to know when I’ve purchased an item or went to a particular location. Having a record of my transactions helps with those details.

10. Reconcile refunds and ensure you’ve been refunded correctly

Keeping track of purchases when you are getting a refund allows you to check if you’ve been refunded correctly. I recently was refunded $6.00 less than I was supposed to be for something and I wouldn’t have known as quickly if I had not had my transaction listed in my notebook.

How to keep track of every purchase

If you’re feeling motivated to keep track of every purchase and gain control of your finances, I’d suggest testing out some systems to find what works for you.

My system is this:

1. Have a notebook with a new section each month laying out: regular monthly bills like rent and phone bills, a section for miscellaneous purchases, a section for each type of regular spending like groceries and gas, a section for points or rewards redeemed.

2. Collect every receipt when I spend money.

3. Write every transaction and corresponding bill payment in the notebook.

It’s such a habit now that I don’t feel like it’s any effort, but it did take a while to build that habit. Doing all of this has helped me gain control of my finances and feel more stable in a world where financial things can often feel precarious.

Have you ever kept track of your purchases? Did you find it helpful for your finances to do so?

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