You definitely have to find a system that works for you. I track my expenses (cash & credit) via a budget form. It's a simple one because I don't track things at a too fine of a level. I take my monthly take-home pay and subtract my constant monthly payments (e.g, mortgage, utility, insurance, etc) to come up with the amount that I can spend per month. Then I come up with a few categories like: gas, groceries, home, and personal (my wife & I each have an allowance). So we put our spending in the different categories. The personal category is the catch-all for stuff like video game purchases, restaurant meals, clothes, etc. The objective is to try to keep our spending below the budget amounts that we have set. If we find that we're spending more on groceries one month because of dinner parties, then it comes out of our personal budget. Ditto for the gas budget because we decided to take more trips.Phades wrote: I agree with you actually. My wife and I have an American Express that we basically deduct the amount we charge on it from our checking ledger. Then when the bill comes we just write a check and don't have to think about it. If you can swing it, I highly recommend Amex because of the free extended warranty on many purchases. It's a pretty great perk. If you have a Costco membership and shop there regularly at all, the Costco one is a great deal.
Major capital items (appliances, car repairs) come out of our savings because they're usually one time events. We save a good amount of our income every month (20%?). I like to think that my good financial habits started at an early age when my parents forced me to save half of all my earnings, birthday presents, etc. So when I wanted to get a $100 boom box, I had to earn $200 because half would go into the bank unlike most of my friends who would spend all their earnings.