How to track your expenses and start building wealth
Published 17 November 2025
Do you ever feel like your money disappears and you do not know where?
That nagging feeling of not really seeing where your cash disappears is more common than you think.
The pain starts when you find yourself wondering why savings are always elusive, despite earning.
You feel agitated when you realise you might be spending more than you realise, because outgoings are too vague, too scattered, too untracked.
The solution? Tracking your expenses.
Without clarity on where your money is going, building wealth is far harder. By recording every outgoing, you gain insight, accountability and power.
This article will guide you step-by-step through creating a comprehensive list of all your spending (from essentials to luxury) help you calculate your total monthly spending and use this data to save more and help to give you the ability to build more wealth.
The link between saving and building wealth
Building wealth is not just about how much you make; it is hugely about how much you keep.
If you cannot control your outgoings, you cannot free up money for saving or investing.
Monitoring expenses is foundational to financial control and healthier saving behaviour. When you start tracking your expenses, you begin to identify unnecessary spending, redirect funds towards savings and shift from reactive to proactive money management. That shift is a key component in wealth building.
By understanding your spending patterns you can make informed decisions: perhaps your essential outgoings are higher than you thought, or your “fun” spending is more than you realise. Once you see the numbers, you can adjust.
This article is written for women who are actively building long-term financial confidence. By embracing expense tracking you will gain clarity over your cash flow, feel empowered to make smarter choices and ultimately build wealth on purpose.
Step 1: Create categories that reflect your life
The first step in tracking your expenses is to divide your spending into meaningful categories:
Essential spending: the items you must pay for to live and function.
Saving: the amounts you regularly put aside to build wealth.
Fun spending: the discretionary items you choose for enjoyment.
Luxury spending: the more occasional big-ticket or high-end items.
Other: a catch-all for anything that does not neatly fall into the above.
These categories help you see not just what you spend but why you spend, and help to give you a framework to assess whether your spending aligns with your values and your wealth goals.
Step 2: List everything that falls under each category
Below is a comprehensive list of expense items you may incur. As you move through this, tick off each one that applies to your life and add amounts for each in your tracking table (see Step 4).
Essential spending
Mortgage / rent
Council tax
Gas and electricity
Water
Cleaner
Window cleaner
Gardener
House maintenance
TV licence
Phone / mobile
Subscriptions (Netflix, Prime, Spotify, etc.)
Car lease / PCP / car loan
Car insurance
Car breakdown cover
Car road tax
Petrol / diesel / car charges
Parking
MOT / service
Car maintenance
Public transport (trains, tube, etc.)
Income protection insurance
Life insurance
Critical illness cover
Private medical / dental insurance
Pet insurance
Home and contents insurance
Boiler insurance
Travel insurance
Phone insurance
Other insurances
Groceries
Health supplements
Nanny / nursery / school / university fees
Maintenance payments out
Pet minding costs
Bank account charges
Loans / credit card repayments
Other essential spending
Saving
Regular investment savings
Regular pension savings
Fun spending
Memberships (gym, PT, golf, etc.)
Eating out / drinks
Takeaways
Personal care (hair, nails, etc.)
Clothes, shoes and accessories
Hobbies
Theatre / music / sporting events
Holidays
Magazines
Charitable donations
Gifts / Birthdays / Christmas
Other fun spending
Luxury spending
Jewellery
One-off travelling trips
New car
Special event
Other luxury spending
By listing every item, you ensure nothing is overlooked. Many people miss small but recurring items (e.g., a subscription) and those are the ones that quietly erode your savings capacity. Tracking helps you find the “drips” in your finances.
Step 3: Calculate your subtotals
Once you have the list and have applied amounts for each line item, the next step is to add up subtotals for each category. These subtotals give you a quick snapshot of where you are spending most heavily and where you might prioritise cuts or reallocations.
Essential spending subtotal = sum of all Essential spending items
Saving subtotal = sum of all Saving items
Fun spending subtotal = sum of all Fun spending items
Luxury spending subtotal = sum of all Luxury spending items
Other subtotal = sum of all Other items
When you start seeing these subtotals side by side, the differences become obvious. Maybe your fun spending is higher than you realised or your essential costs leave little room for savings. That awareness is powerful.
Step 4: Find your total monthly spending
Now add together the category subtotals to calculate:
Total monthly spending = Essential + Saving + Fun + Luxury + Other
This single figure gives you a clear number: how much you are spending each month across all categories. With this number you can benchmark your income, assess your savings ratio (Savings ÷ Total spending) and set realistic targets.
For example: If you spend £3,500 each month and you save £700 monthly, your saving rate is 20%. If your goal is a 30% rate then you can clearly see you have to either reduce spending in one or more categories or increase income.
Step 5: Spot spending leaks and emotional spending
Tracking your expenses reveals two common obstacles to building wealth: spending leaks and emotional spending.
Spending leaks are small, repeated costs that you barely notice but which add up significantly (for example, unused subscriptions, frequent takeaway coffees, recurring parking charges). When you track your expenses, you capture these and can take action.
A helpful next step is to check your recent bank statements alongside your expense list. Many people are surprised by what they find: forgotten subscriptions, impulsive online purchases, or small recurring fees that no longer add value. This simple review can uncover money you did not even realise was leaving your account each month.
Go through each transaction line-by-line. Ask yourself:
Do I still use or value this?
Does this fit into my current priorities?
Is there a cheaper or better alternative?
Cancel anything you do not need and no longer value. This step alone can free up meaningful amounts of money to redirect toward savings or investments.
It is also wise to review your spending categories and bank statements, ideally monthly but at the very least, once a year, because life changes. New routines, family needs, or career shifts can alter how and where you spend. An annual review ensures your budget remains aligned with your values and your goals.
Emotional spending is spending driven not by need but by feeling (stress relief, reward, boredom). When you track, you start seeing patterns: perhaps you spend more on clothes when you are stressed, or you order takeaways when catching up with friends. Recognising these patterns puts you in a stronger position to make conscious choices.
By reviewing your fun and luxury spending lines, and cross-checking with your bank statements, you can ask yourself: Is this aligned with my values? Is this bringing me real joy or am I just filling a gap? That reflection is key for women building long-term wealth, because it links spending with meaning.
Step 6: Tools and methods to make tracking easier
While a simple spreadsheet will do, technology offers helpful options:
Digital banking platforms often categorise your spending and give visual summaries.
Expense-tracking apps allow you to record on the go, set limits, and see trends.
Spreadsheets (e.g., Google Sheets, Excel) give you full control and flexibility. If you would like a spreadsheet with my Spending tracker, send me a message to ask for it here.
Manual methods (paper receipts, envelope systems) may work if you prefer low tech.
Regardless of the tool, consistency is what matters.
Tip: Set aside a monthly time slot to update your tracker. That rhythm will help it become a habit, not a chore.
Step 7: What your spending says about your values
When you track your expenses you not only see how much you spend, but what you spend on. That helps you reflect on whether your money is aligned with your values.
For instance: If you place high value on travel and connection, but your luxury and fun spending categories show minimal allocation to holidays or experiences, you might choose to redirect funds from another area.
If sustainability is a value, then your car / petrol / maintenance lines might prompt you to rethink commuting or vehicle choice.
Tracking your expenses becomes less about restriction and more about intentionality. You begin using your money as a tool to build the life you genuinely want, rather than being driven by unconscious spending habits.
Step 8: How to use your expense tracker to build wealth
Here is how you turn the expense-tracking data into real wealth-building action:
Set a target saving rate. Based on your total monthly spending, decide what proportion you aim to save (e.g., 20-30 %).
Monitor each category. If essential spending is too high relative to income, you may need to review renegotiation (for example mortgage/rent, utilities, insurance) or reduce discretionary spending.
Reallocate savings. Once you identify funds freed by reducing spending leaks, funnel those into your savings & investment categories.
Use subtotals to prioritise. If fun or luxury spending is crowding out savings, decide if you will temporarily reduce those until your saving goals are on track.
Review regularly. Monthly reviews of your tracker enable you to spot changes quickly, avoid getting off-course and adjust as your life or income changes.
Celebrate progress. Building wealth is a journey. When your saving rate improves, or your luxury spending becomes more aligned with your values, acknowledge the progress.
By embedding expense tracking into your regular money habits, you shift from reactive spending to proactive wealth-building.
Key points (Quick takeaways)
Tracking your expenses is the first critical step toward building wealth because it reveals where your money truly goes.
Dividing spending into categories (Essential, Saving, Fun, Luxury, Other) gives structure and clarity.
Listing every item, especially recurring ones like subscriptions or maintenance costs, ensures nothing slips through the cracks.
Subtotals and a total monthly spending figure enable you to benchmark and set realistic saving goals.
Expense tracking helps expose spending leaks and emotional spending patterns, enabling you to redirect funds toward your values and wealth goals.
Choose a tool (app, spreadsheet, manual) you will actually use, and commit to regular tracking and review.
Use your expense data to align your spending with your values, increase your savings rate and build intentional wealth.
Bridging to other blogs you will love
While this article explores how much you might need, you may want to learn more about how to act today or how to lean into your strengths. Check out:
The difference between wealth management and financial planning
Why your relationship with money matters in financial planning
Conclusion
Tracking your expenses is about awareness rather than restriction. When you pair your expense tracker with your bank statements, you gain a full, accurate picture of where your money goes, including forgotten subscriptions or impulse purchases that quietly drain your balance. Cancel anything that no longer adds value or reflects your priorities. Even small cuts can add up to meaningful progress.
Review your spending at least once a year. As life changes, so will your expenses. Annual reviews ensure your money continues to reflect your current goals, values, and stage of life.
When you know where your money goes each month, you can decide where you want it to go next. You can prioritise savings, invest in your future, and make meaningful choices aligned with your life goals. This process empowers you to move beyond simply earning income toward actively building wealth. Use the categories and tracking table above, review your bank statements, and watch as small shifts in awareness translate into lasting financial confidence and freedom.
Frequently asked questions
Q1: How often should I update my expense tracker?
You should aim to review this at least once a year, or with any significant life changes.
Q2: What do I do if I miss tracking some expenses?
If you forget to record an expense, note an approximate amount at the end of the month under the correct category. The goal is consistency, not perfection. Over time you will get better at capturing everything.
Q3: My essential spending is high relative to income. What should I do?
First, check if you can reduce any essential costs (for example utilities, insurance, subscriptions). Then explore whether you can increase your savings by reducing fun or luxury spending or increasing income. Tracking helps you see exactly where the pressure lies.
Q4: Can expense tracking really help me save more?
Yes. Feedback from my clients has been that since they started tracking their spending, they have more clarity and save more.
Q5: Should I include income in my tracker too?
While the emphasis here is on outgoings, you should absolutely be aware of your income. Knowing both your income and your total monthly spending enables you to calculate your saving rate and make informed wealth-building decisions.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
SJP Approved 14/11/2025
