It’s no secret that tracking your expenses is an important part of early retirement. If you’ve looked at my monthly spending reports, you know that I use CountAbout to track my expenses. Prior to using CountAbout I logged everything in a spreadsheet. This post explains why we’ve switched our expense tracking over to CountAbout and why I think CountAbout is the best app for tracking expenses and receipts.
Note– this is a sponsored post and contains affiliate links. While the content is sponsored, I really do use CountAbout to track my expenses and receipts. The sponsored post came at a great time because I have been excited to write more about how I use CountAbout to track our expenses for early retirement.
Why you should track expenses
Calculate your retirement needs
The most important reason you should track expenses is so you know how much money you need to retire. Many financial advisors based retirement calculations on replacing a percentage of your income. While that makes their job easy, it doesn’t help you figure out how much money you really need.
We only spend half of our income and save the other half. Therefore, retirement advice saying that we need 80% of our income in retirement is dumb. If we don’t need 80% of our income now, why would we need 80% in retirement?
When you’re tracking your expenses, you know exactly how much you spend each month. You can then build up a portfolio that supports your actual lifestyle. You’re in control and don’t have to chase an arbitrary number chosen for you by someone who may make a percentage of the money they help you invest.
See what’s important to you
Another great reason to track your expenses is to make sure you are spending money on what you care about. As James Frick said,” Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.“
If you say that family is important to you, hopefully your expenses reflect family vacations and family activities. If you say you value wellness but your expenses show an expensive fast-food habit, you might want to reevaluate what is truly important to you.
Find hidden expenses
Finally, if you’re not tracking expenses, you’re never going to find hidden expenses that are eating away your wealth. I’m always blown away by conversations with friends where they make an offhand remark about not being able to keep track of all of their streaming services. Um, excuse me, don’t you examine your credit card statements?
Because I track my expenses, I’ve caught numerous charges for services that I thought I’d canceled and was able to follow up right away. It’s one thing to consciously spend money on things you don’t need. But spending money without even knowing about it is the worst!
Why you should keep receipts
Health Savings Accounts
Health savings accounts are one of the best games in town. You can put money into the account tax-free. You can take money out of the account tax free. And your money can grow tax free.
However, you can only take money of the account without paying taxes if they are for qualified medical expenses. If audited by the IRS you need to produce receipts to show that the withdrawals were justified. That’s why it’s a best practice to use an app for tracking expenses and receipts.
Running a small business can be great. You get to deduct all of your business expenses. However, you need to document all of your business expenses. While you could, in theory, have a paper file in a filing cabinet where you keep all of your receipts, wouldn’t it be best to just app for tracking expenses and receipts?
Why CountAbout is the best app for tracking expenses and receipts
Tracking expenses in CountAbout
Tracking expenses in CountAbout is easy. You can link your bank accounts. Then, when you log into CountAbout it will automatically download all new transactions across your accounts and load them to your dashboard.
Before CountAbout will record the transactions, you need to review and inspect them. This is a super important feature for me. I’ve used other budgeting apps like Mint or Personal Capital and would “see” various dial gauges of my spending but never really “felt” their impact. That’s why I used a spreadsheet for so long. I wanted to get “physical” with each transaction.
You can also categorize each transaction however you want to. I hated how Mint would lump all of my hotel expenses as “travel” when most of my hotel costs were for work travel that was reimbursed. I wanted to characterize that as “work” or make it invisible from my finance tracking entirely. CountAbout allows me to have full customization, including the ability to split a transaction. (Did you buy makeup at the grocery store with a gallon of milk? You can split it into two categories if you want).
Attaching receipts in CountAbout
CountAbout also allows you to attach receipts. I use this to store all of my receipts for my business (the blog) and for my health savings account.
The attachment feature is super intuitive to use. The easiest way to add an attachment is in the landing screen where you review and approve transactions. As you can see below there is a paperclip button near the option to approve the transaction. This opens a dialog box you can use to attach a receipt. I’ve attached image files and pdfs. You might be able to attach other types of files too- I haven’t tried it out.
To retrieve your receipt later, you can simply find the transaction you want, click on the paperclip button, and your receipt magically pops up. At its core, CountAbout is a database. So it is surprisingly easy to query your transactions to find exactly what you need to find.
Side note: I also love that golden “a” button. I buy a lot of items on Amazon. Characterizing and tracking those expenses are difficult. Clicking the “a” button takes you directly to your amazon orders where you can find the purchase in question (and find the receipt, if you want to attach it).