‘œIt’s hard to lead a cavalry charge if you think you look funny on a horse.’ ‘“ Adlai Stevenson

Expense TrackerYou would think since I write about money and work in technology that I’d be at forefront of all the Web 2.0 tools available for personal finance. But I’m a surprisingly late adopter and admit that I just started paying my bills online in 2006.

My mother used to say, ‘œDo as I say, not as I do.’ This was usually after we caught and called her on some bad habit’¦ like standing in front of the refrigerator eating cold pizza for breakfast while we were told to finish our sodden cornflakes. So here’s my bad when it comes to personal finance’¦ I don’t track my expenses even though all the experts suggest that we should do this exercise.

Don’t get me wrong, I believe in principle that expense tracking is a good idea but when I’ve tried it on more than one occasion, I came to the conclusion that I don’t blow money on incidentals. I know that’s hard to believe but it’s true. Unfortunately, most people do spend money on these types of expenses.

David Bach calls this ‘œThe Latte Factor’ which refers to those small daily expenditures made without thinking twice about them. He writes, ‘œBefore you get up in arms about giving up coffee, let me be clear: The Latte Factor isn’t about coffee at all. It’s about learning how to ‘œfind your money’ and redirect it toward savings.’

At BCS Alliance.com, they cite two types of expenses: ‘œThere are two types of expenses you face each month: fixed and variable. Examples of fixed expenses are your mortgage or housing payment, car loans, personal loans and anything else that cannot easily be changed or eliminated each month. To alter a fixed expense would require refinancing your mortgage, car payment, selling off assets, etc.’

‘œVariable expenses include those that can be changed or eliminated entirely, such as food, clothing, entertainment, vacations, utilities, etc. Since it is much easier to reduce variable expenses than it is to reduce fixed expenses, this is where you should start to cut back.’

So how can we keep track of both fixed and variable expenses? Well, there’s always Quicken’¦ but that seems so old school. Here are three ways to get started:

The CashTrack budgeting program at MoneyPants. Their online program allows you to sort your spending NEEDS and WANTS quickly. They lists NEEDS in red and WANTS in green. They write, ‘œPay your NEEDS, keep your WANTS on target, and all your numbers turn GREEN!’

The service is subscription based and will set you back $9.95 per month. If FREE is more your style, then here are two other services available ‘“ both are still in beta but worth checking out.

Mint is in the process of building a simple and secure personal finance web-app that’s designed to be effortless. Here’s their elevator pitch, ‘œMint consolidates your financial life in one place. Easily see how much you have, how much you owe, and where your money goes. Advanced alerts notify you before you bounce a check or forget to pay a bill. Patent pending algorithms even show you personalized ways to save and make more money. If your finances could use organization without effort, Mint is for you.’

Finally, my favorite is Expensr because it’s like the Facebook of personal finance software. It’s a free financial Web application with social smarts. According to Business 2.0, ‘œExpensr is a Web-based application that’s both free and easy to use. Expernsr strips it down to the basics, telling you in large, friendly numbers what you really want to know: how much you’re spending and how many days it will take, at the rate you’re going, to become a pauper or millionaire.’

‘œOf course, Expensr wouldn’t be a Web 2.0 company if it didn’t have a social component. By adding tags and categories, such as location, occupation, and income level, you can compare yourself with your peers. You might see that you spend 30 percent of your income on food, but you have no idea if that’s good or not. That’s the idea behind the social network, to help you do better by making you aware of what other people like you are doing.’

Want some other options? Mashable.com, the social networks news blog provides a list of 40+ Resources for Managing Your Money Online. Eighteen of those resources are budget organizers. And don’t forget John’s handy Expense Tracker that you can download here at Queercents.

And now that you’re on track with your expenses, be sure and get to work today without buying a latte!