I use Quicken rather than a spreadsheet and have done for years. You can choose how much or little detail you track. For example, you could track all clothing purchases under one category: clothing. Or you could break it down into sub-categories like kids' clothing, shoes, etc. I do separate out sales tax from all purchases because at the end of the year I want to be able to see exactly how much I spent in sales tax (so I know which deduction to take on my state taxes). I put every cent I spend into Quicken, even if it is just 50c at a vending machine for a soda. That way I can see exactly where my money is going. It proved invaluable a couple of weeks ago when my purse was stolen. I had all my card numbers recorded, along with the phone number to report them stolen, so it made it that much easier when calling to cancel them all, to be able to tell them the card numbers.
It takes a little while to get set up initially but after that keeping track is a snap. I have all my accounts set up to download new transactions from the financial institutions so every morning I ask it to update and it basically does it all for me. The only thing I have to enter manually is my cash transactions. After download, Quicken will even suggest categories for everything based on your previous purchases with that merchant. For example, for a Kroger transaction, it will suggest "groceries". For Walmart, since I get my oil changed there, buy household items and buy groceries, it will list all three in a drop down so I can choose the correct one for the new transaction.
While there is an initial investment in the software, unlike setting up your own spreadsheet, the savings in time is a consideration. Plus, if you itemize, you can itemize the cost of Quicken, (if you have any investment accounts, 401K etc) that you track via the software, as an investment expense.
