Tracking Every Dollar: How Do Information Sources Support Budgeting?

ABSTRACT

Budgeting is widely recognized as a key contributor to financial well‐being, yet little is known about how people gather the information needed to track expenses, how this shapes the quality of expense records, or whether that quality matters for household finances. Using nationally representative data from the 2023 Survey and Diary of Consumer Payment Choice, we show that individuals rely on multiple information sources when recalling expenses, with 65% using several simultaneously. Employing more sources is associated with higher tracking data quality (fewer imprecise and incomplete records), and consulting financial records and receipts outperforms memory. We further find that greater precision in recorded amounts is associated with stronger household financial resilience, including absorbing an emergency expense and avoiding cash‐flow‐related fees. These findings offer new evidence on everyday budgeting and suggest that multi‐source tracking may strengthen budgeting effectiveness.