The absolute first step of budgeting is of course knowing how much you spend. It seems obvious when you say it, doesn’t it? But here’s the thing. No one seems to actually know what they’re spending.
Whose fault is it? Probably everyone. The banks are playing “hide the ball” with your spending, and credit cards make it worse. Most people prefer not to track, or simply aren’t good at tracking. Let’s be honest, most people just wing it and it feels “good enough”.
A few days ago, a friend asked for help with her diet. Not because I’m any kind of expert, probably because she sees me as a sensible guy who might come up with a decent strategy.
I jumped right in: “what did you have yesterday?” She proceeded to give me a vague idea of what she had, and followed up with “wait, that was the day before”.
You can see where I’m going with this. She has no idea what she eats, and when, and how much it costs, for that matter. And this is someone who cares deeply about both her diet and her spending. Whether it’s avoidance or laziness (not everyone is a natural tracker) is beside the point. But the result is the same: She doesn’t know what she ate yesterday, and she doesn’t know how much she spent.
All this is really to say the following: the first step of budgeting and making a real difference in your finances is simply to know how much you spend.
Whether it’s directly with your bank, a money budgeting app, or the Apple Wallet widget — that’s up to you. Whatever works.
How I actually track my own spending
As I wrote here, I currently use 4 accounts for spending:
- Club Lloyds (bills)
- Santander Rewards 3% (all food and travel)
- Chase Credit 2% (groceries)
- Lloyds Ultra 1% (all other spend)
My cashback system already takes care of the main spending categories. Bills, groceries, food and travel are already sorted through the cards I use. Here’s the messy bit: while Chase (groceries) and Lloyds (bills) track it for me, the Lloyds Ultra and Santander don’t.
For those, I simply use Apple Wallet
Final thought
It doesn’t matter what bank you use, debit or credit, and whether you have 1 or 10 cards. At the end of each month you should have two numbers: how much came in and how much went out. Not knowing those is a real non‑starter. Just like you can’t improve your diet if you don’t know what it is to begin with.
