A personal perspective from the founder of PennyGo
I’ve lost count of how many times I’ve started a new budget with the best of intentions.
I’d download an app, set up my spending categories, decide how much I wanted to spend on groceries, entertainment and other expenses, and carefully record my purchases. For a while, it felt great. I could see exactly where my money was going and whether I was staying within my limits.
Then life would get busy.
I’d forget to record a few transactions. A couple of days later, I’d remember, but wouldn’t have time to catch up. Before I knew it, there was a growing list of expenses to reconcile, and something that was supposed to make managing my money easier had become another chore.
Eventually, I’d give up. Not because I’d stopped caring about my finances, but because I’d stopped maintaining the system that was supposed to help me manage them.
Looking back, I wonder whether I’d been asking too much of my budget.
When tracking becomes the problem
There’s genuine value in understanding where your money goes. If you’ve ever looked back through your bank statements and been surprised by how much you’ve spent on takeaway, subscriptions or small purchases, you’ll know how useful that information can be.
But there’s a difference between learning from your spending and having to document it continuously.
A 2016 study published at the ACM Conference on Human Factors in Computing Systems explored why people stop using personal tracking tools, including financial trackers. Researchers surveyed 193 people and interviewed 12, identifying several reasons for abandoning tracking, including the effort involved.
It’s a small piece of research rather than proof that expense-tracking apps are ineffective, but the experience it describes is familiar. When keeping records requires repeated attention, missing a few entries can make returning to the task feel increasingly demanding.
Research from the Financial Consumer Agency of Canada offers another perspective. In a longitudinal budgeting study, 35% of participants who weren’t budgeting at follow-up identified feeling overwhelmed by managing money as a barrier.
The research doesn’t establish that recording transactions caused that feeling. It does, however, raise an important question: if budgeting already feels overwhelming, are we helping people by giving them more work to do?
I also tried apps that automatically connected to my bank accounts. They removed much of the manual entry, but I still found myself correcting categories and relabelling transactions. And although bank connections can be convenient, I was never entirely comfortable providing another service with access to my financial information.
For me, automation hadn’t completely solved the maintenance problem.
Knowing what you’ve spent isn’t the whole picture
There’s another distinction worth making: tracking spending and planning spending aren’t quite the same thing.
In a 2023 Lancaster University study, researchers examined 45 highly rated budgeting apps. Every app supported transaction tracking, yet around a third lacked budgeting functionality based on allocating money to separate purposes or envelopes.
It’s an interesting finding because a detailed record of yesterday’s purchases doesn’t necessarily answer tomorrow’s financial questions.
Will there be enough set aside when the car registration arrives? What about the annual insurance renewal, the quarterly electricity bill or an expense that only comes around occasionally?
I had experienced this firsthand. There were times when I was juggling credit cards to cover bills I hadn’t properly prepared for. I could look back and see what I’d spent, but that wasn’t helping me consistently put money aside before the next bill arrived.
I needed my budget to do more than describe what had already happened.
The change that finally worked for me
Being fairly comfortable with Excel, I eventually built my own spreadsheet, drawing inspiration from bucket-style budgeting and ideas popularised by The Barefoot Investor.
Rather than recording every purchase, I started with the expenses I knew were coming. I worked out what those commitments would cost over time and how much I needed to set aside from each pay to prepare for them.
I then used a dedicated bank account for bills, funded by one reasonably steady weekly transfer. My direct debits came out of that account, and I had a much clearer picture of the money left for everything else.
It didn’t mean I could spend without thinking. I still needed realistic estimates for everyday expenses, and the plan needed adjusting when bills or circumstances changed. Unexpected expenses could still happen.
But I no longer had to record every transaction to keep the basic plan useful.
Interestingly, this approach isn’t far removed from guidance offered by ASIC’s Moneysmart, which recommends considering separate accounts for bills, spending and savings, along with regular transfers to make budgeting easier.
The approach that worked for me was less about monitoring every financial decision and more about establishing a routine that anticipated important commitments.
That spreadsheet eventually became the inspiration for PennyGo, which I created to make this style of forward planning accessible without having to build your own spreadsheets.
A budget should work even when life gets busy
I wouldn’t discourage anyone from tracking expenses. For people trying to identify spending habits, reduce unnecessary costs or understand where their money is disappearing, a few weeks of detailed tracking can be incredibly revealing. Some people genuinely enjoy the process and maintain it successfully for years.
The question is whether it needs to be a permanent responsibility.
Perhaps a more sustainable approach is to use spending records to establish realistic expectations, prepare for known bills and savings goals, and then review the plan when something meaningful changes.
For some, that will involve a detailed budgeting app. For others, it might be separate bank accounts, regular transfers and an occasional review of actual spending. There’s no single method that suits everyone.
What matters is finding a system that continues to be useful after the initial enthusiasm wears off.
For years, I thought the answer to better budgeting was to become more disciplined about recording every dollar. Eventually, I discovered that I made more progress by creating a plan that didn’t require so much ongoing attention.
I still believe it’s important to know where your money goes. I just think it’s equally important to know where it needs to go next.