How to Perform an Expense Audit

in Personal Finance

One of the wisest financial moves you can make is to ensure your money is being spent consciously. No, that doesn’t mean you’re spending while you sleep. It means many of us go on autopilot when it comes to bills and expenses without considering why we’re spending. Taking the time to set up a budget is all well and good, but without taking time to examine your expenses you may be spending more than you want.

The word audit may strike fear into our hearts, but performing an expense audit can help you identify expenses that aren’t important to you or don’t fit your long-term financial goals. I’m going to walk you through an expense audit step by step, and by the end you should have some ‘found’ money.

How to Perform an Expense Audit

Make Time: 

You’ll need to block off about 3-4 hours typically if you already have a budget in place and organized bills. If you need to organize those things first, plan to spend an additional 3-4 hours for organizing bills and crafting a budget as well.

Tip: Budgetable can help! Use Budgetable to track your expenses and spending.

Collect data:

Start with a pile of recent bills (preferably the last 3 months), bank statements, credit card statements, and your budget. Basically anything that relates to your spending and saving habits needs to be available.

Check your goals:

If you don’t have a concrete list of short-term and long-term financial goals, now is the time to make one. Use SMART goal setting to create achievable and realistic goals. If you do have goals on paper, it’s time to check on your progress before you get started. You should be able to walk away from your goals with a concrete number in mind that you need to be saving or investing.

Make a List:

Make a list of all your regular expenses (listed monthly, bi-monthly, quarterly, etc.). Look over spending data for the last 3-6 months. Calculate the average you’re spending in 5-10 main categories. Some examples are listed below.

Regular Bills


Cell Phone

Sewer bill
Gym membership
Car Insurance

Expenses (on average):

Dining Out
Clothing & Shoes

Go Through Each Category/Bill:

Next you’ll go through each category and bill to confirm that the expense is ‘worth it’ to you. This part is extremely subjective, and what matters to you may be vastly different from what matters to me. For couples you may have to compromise, but with your goals in mind you will find it easier. One example would be decreasing your phone plan. You may also make goals like slashing a percentage of spending in one category. The end goal is the same though, see what you can do without or do with less of.

For more ideas check out 15 Ways to Live on Less

Get Creative:

Are there creative ways you can dump some expenses? You might consider cutting the cable and using Netflix, Hulu, and other free services to stream TV shows and movies. Or you might consider getting rid of your gym membership in favor of an outdoor activity instead.

Look for Discounts and Deals:

Beyond using coupons for groceries and other goods, you may find deals or discounts available for a number of expenses. For instance, purchasing insurance through a professional association may offer you a discount, or bundling insurance products may be a great deal.

Take Time:

If you have larger expenses you’re considering get rid of like getting rid of a car or refinancing, give yourself a deadline to collect all the information need to make an informed decision.

Put Savings to Work:

Now that you’ve completed your expense audit, you will have ‘found’ money you can use to further your goals. Put your money to work for you by increasing saving or investing, but don’t forget to spend some on things you really do enjoy.


Performing quarterly expense audits can help you stay in line with your budget, and goals both in for now and for your financial future.

What advice do you have for slashing expenses?

About Kelly

Kelly Whalen is the founder of The Centsible Life, a blog where motherhood and money meet. Her goal is to help readers live well on less. Kelly is a mom to 4, and loves that she can stay at home with her kids, and still pursue her passions for writing, personal finance, and social media. You can often find her on twitter and Facebook talking money and motherhood.

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