Why Tracking Your Expenses Is the First Step to Getting Out of Debt
- Maha Sultan
- Jun 30
- 7 min read
Living paycheque to paycheque? You’re not alone, and you’re not failing. The first step to getting out of debt isn’t drastic cuts or new loans. It’s simply knowing where your money goes. For many Canadians, the road to debt recovery doesn’t start with cutting up credit cards or applying for a loan, it begins with one powerful habit: tracking your expenses. Read below to find out how getting out of debt starts with tracking your expenses, and why this matters.
Canadians Are Struggling with Spending
According to a 2024 report from Statistics Canada, around 45% of Canadians say they struggle to cover daily expenses. This paints a clear picture: for nearly half the population, even routine spending has become a source of stress.
This growing financial pressure is largely attributed to the continued effects of inflation, rising interest rates, and stagnant wage growth. While the cost of living has surged, from groceries to gas to rent, income levels haven’t kept pace. As a result, many households find themselves dipping into credit to cover essentials, which quickly leads to unmanageable debt.
In urban centres like Calgary, where housing and utility costs are higher than the national average, the burden is even heavier. Many residents are one emergency, such as a car repair or medical bill, away from serious financial instability. Even those with steady employment are struggling to build savings or pay off existing debt.
This financial fragility highlights why expense tracking is a survival strategy. When you understand where your money is going, you can begin to regain control, reduce unnecessary spending, and create space in your budget to tackle debt head-on.
Common Myths About Tracking Expenses
Myth #1: “Tracking expenses takes too much time.”
This is one of the biggest misconceptions, and the easiest to debunk. The truth is, tracking expenses doesn’t have to be complicated or time-consuming. In fact, once you get into the habit, it takes less than 5 minutes a day. Most budgeting apps automatically categorize your transactions, and even a simple notebook only requires a few quick entries each evening. A small daily habit can lead to major financial insight.
Myth #2: “I already know where my money goes.”
You might have a general idea - rent, groceries, phone bill - but small, unnoticed purchases often add up. Think coffees, delivery apps, subscriptions you forgot about, or impulse buys at the checkout counter. Without tracking, it’s easy to underestimate how much these “little things” impact your budget. Expense tracking helps you compare your assumptions with reality, and the difference can be eye-opening.
Myth #3: “I don’t make enough money for tracking to matter.”
Whether you make $1,500 or $15,000 a month, how you manage your income matters. Expense tracking isn’t just for people with high incomes, it’s even more crucial when money is tight. It helps you spot spending leaks, prioritize essentials, and make room for debt payments or savings, no matter your financial situation.
Myth #4: “I’ll feel guilty seeing where I spend”.
Yes, tracking can reveal some uncomfortable truths, but that’s a good thing. Awareness is empowering. You can’t fix what you can’t see. Tracking doesn’t exist to shame you; it’s simply a tool to help you take control. And most people feel less anxious about money once they start tracking it consistently.
Why Expense Tracking Is a Game-Changer
Tracking expenses is about awareness - it reveals where your money truly goes, not just where you assume it does.
Many people assume their debt stems from big purchases. But often, it’s the small, habitual expenses, such as your daily coffee, food delivery, or subscription fees, that quietly add up and create financial strain. When you track every dollar, you begin to notice patterns and identify leaks in your spending.
Here are the most powerful ways expense tracking helps in debt recovery:
1. You Discover Your Spending Triggers
When you keep a detailed log of your purchases, you’ll start to recognize emotional or situational spending habits. Maybe stress pushes you to order takeout more often. Or perhaps sales tempt you into unnecessary online shopping. Recognizing these triggers is the first step in managing them.
2. You Create a Realistic Budget
Budgeting without accurate numbers is bound to collapse. By tracking expenses for a month or two, you’ll gather the data you need to create a budget that’s rooted in reality, not guesswork.
3. You Build a Foundation for Debt Reduction
Once you understand where your money is going, you can begin redirecting funds toward your debt payments. Even small savings, like cutting back on daily lattes or switching to generic brands, can snowball into meaningful contributions toward reducing your balances.
4. You Stay Accountable
There’s a psychological benefit to writing things down. Whether you use a notebook, spreadsheet, or mobile app, tracking makes you more intentional about spending. It turns mindless purchases into conscious decisions.

Simple Expense Tracking Tips That Actually Work
Getting started doesn't have to be overwhelming. Here are some beginner-friendly expense tracking tips to help you build a system that sticks:
Use What Works for You: Whether it’s a digital app like YNAB (You Need A Budget) or a simple pen-and-paper journal, the best method is the one you’ll actually use.
Track Every Dollar: Include fixed bills, variable spending, and even cash purchases. Small transactions matter.
Categorize Expenses: Break down your spending into categories like groceries, dining, transport, entertainment, and debt payments. This helps identify overspending areas quickly.
Set Reminders: Schedule a weekly check-in with your expenses. This keeps the habit fresh and helps prevent end-of-month surprises.
Review and Adjust: After 30 days, assess your spending data and make any necessary changes to your habits or budget. What you measure, you can manage.
Recommended Tools and Resources for Expense Tracking
Choosing the right expense tracking tool depends on your personal style and financial habits. Below are some options matched to common user types—click the tool names to learn more about features and pricing.
Goodbudget: For the Visual Organizer
If you prefer hands-on control and like managing money with the envelope budgeting method without linking your bank accounts, Goodbudget is a great fit. It helps you plan spending by allocating funds into categories you can see clearly.
YNAB (You Need A Budget): For the Dedicated Planner
Ready to break the paycheck-to-paycheck cycle? YNAB offers a detailed, proactive budgeting system designed for those who want to manage their money based on the funds they actually have and build lasting financial habits.
PocketGuard: For the Busy Multitasker
If you want quick insights at a glance, PocketGuard simplifies your daily spending overview by showing how much “spending money” you have left after bills, savings, and debt payments.
Google Sheets or Excel: For the DIY Enthusiast
Love full customization? Building your own tracking system with Google Sheets or Excel lets you create personalized categories, track manually, and use formulas to fit your unique budgeting style.
Pen-and-Paper Journal
Old school but effective. Writing things down by hand can increase mindfulness and help you emotionally connect with your spending habits. Great for people who prefer to unplug from digital tools.
How to Get Started in 5 Minutes
You don’t need a full financial overhaul to begin. Here’s a super simple five-step process to start tracking your expenses today, even if you’re not “good with numbers.”
Step 1: Choose Your Tracking Method | Pick a method that works for you: a budgeting app, a spreadsheet, or a physical notebook. Don’t overthink it, just choose one you’ll stick with. |
Step 2: Log Today’s Spending | Even if you’ve only bought a coffee or paid a bill, log it! This creates the habit of noticing your daily spending. |
Step 3: List Your Fixed Monthly Expenses | Write down your regular bills like rent, utilities, car payments, internet, subscriptions, etc. These are the non-negotiables. |
Step 4: Set Up Categories | Create a few basic spending categories:
This will help you group your spending and spot trends later. |
Step 5: Set a Weekly Check-In Reminder | Pick a day and time each week (e.g., Sunday evenings) to review what you spent, how it aligns with your goals, and what needs to change. Weekly reviews keep you consistent and help prevent surprises at month’s end. |
What Happens After You Start Tracking?
The magic of expense tracking lies in the ripple effect it creates. Once you build the habit, you'll find yourself:
Cutting back naturally on unnecessary expenses.
Prioritizing debt payments because you see what’s truly affordable.
Feeling less anxious about money, because you’re in control, not your debt.
These wins add up. And they lay the groundwork for exploring more strategic financial solutions, like debt consolidation, consumer proposals, or debt counselling, if needed.
When Tracking Isn't Enough
Sometimes, expense tracking reveals a deeper issue: your income simply isn’t enough to cover your debt obligations. If so, it may be time to consider seeking professional support. You’re not failing, but just facing a situation that requires expert support.
In Alberta, SCB Debt Solutions offers personalized, judgment-free consultations to help you understand your debt options. Whether you’re just starting to track your expenses or are already feeling buried by your financial obligations, our team can guide you through real solutions tailored to your life.
FAQs related to Expense Tracking
1. How long should I track my expenses before making changes?
A good rule of thumb is to track your expenses consistently for at least 30 days. This gives you a full snapshot of your monthly spending habits, including bills, variable costs, and impulse buys. After that, you’ll have enough data to create a realistic budget or start making small adjustments. Think of it as your financial “diagnosis” before starting treatment.
2. Do I need fancy apps or tools to track my expenses?
Not at all! While apps like Goodbudget, YNAB, or even your bank’s budgeting features can make tracking easier, all you really need is a notebook or spreadsheet. The most important thing is consistency. Choose a method that feels simple and sustainable for you.
3. What if my spending doesn’t leave any room for saving or debt payments?
If tracking your expenses reveals that your income isn’t enough to cover your basic needs and debts, that’s a sign you may need more than budgeting. In that case, it might be time to speak with a Licensed Insolvency Trustee. You’re not alone, and there are programs like consumer proposals or debt relief plans that can help.
4. What’s the difference between budgeting and expense tracking?
Expense tracking is about recording where your money actually goes. Budgeting is about planning where you want your money to go. Tracking comes first because it gives you the data to build a realistic budget. Without tracking, your budget is just a guess.