We all know that we should track our spending, but not everyone actually does. How does one develop this discipline? One AskMetafilter user pleads:
Do you have any tricks to ensure that you track your money? I would like to track what I spend and what I spend it on. I have software to do this, but I hardly ever use it. I’m looking for more of a software-independent way of thinking about my cash flow that will help me stay on top of it. This is really more of motivation thing than a “how to” or “what’s the best system” question. What are ways to help me think about my money that will give me a better handle on keeping track of where it goes.
Back when I lived paycheck-to-paycheck, I knew that if I didn’t track my spending, I would likely become overdrawn. Those huge overdraft fees provided excellent motivation. I learned to tuck every receipt into my wallet. I placed all money-related mail and paperwork in a cubbyhole on my computer desk. Most of all, I made it a habit to do my finances at least once a week.
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I save receipts religiously, but I still fall behind. For me it’s about paying by credit card so it all downloads to Quicken. As soon as I pay cash, I lose the ability to track it.
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One method to try is to have separate accounts for different types of expenses. For example, a savings account for direct deposit and saving only; a separate account for automatic payments (say, for bills, mortgage payments, etc); and another for cash withdrawals (that you can pull from an ATM) and discretionary (i.e. “want” versus “need”) spending. This way, you can see which account is falling behind, and adjust automatic transfers between them so they stay constant (except, hopefully, your savings account).
It helps if these accounts are all at one bank so automatic transfers between them is easy. Also in many banks, you can set up automatic overdraft protection, so if you pull too much cash from one, and forget to transfer over the money, the bank will automatically transfer from a predefined account (like the savings).
Of course, this is a moot point if you’re living paycheck to paycheck. That’s why it’s SO important to SAVE BEFORE YOU SPEND.
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One thing I found useful: maintain your receipts in seperate boxes (monday, date; tuesday, date) etc. As the boxes start piling up, you force yourself to itemize the receipts to clear the mess.
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I still live “paycheck-to-paycheck”. The objective is to know a sum of available money at any time (or at least how it was in the morning).
That’s why gathering receipts does not work, if you do not add them to the balance immediately (or on daily basis).
These tricks help me:
- I have a really SIMPLE java app in my cell phone which I use to enter any transaction. Anything like it will do, e.g. small notebook, reverse of a business card… I enter these transactions to a Quicken-like software at the end of the day. That allows for tracking transactions you did not get the receipt for.
- I eliminate cash transactions as much as possible. Small change tends to get lost in huge amounts
- Last Sunday in every month I check the content of my wallet and enter “adjustment” transaction into my cash account. That includes all the newspaper, candy, coke or other small cash transactions I did not enter into tracking tool.
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I just recently started tracking all of my spending. Pear Budget and a coffee can full of receipts seems to do it for me, but I guess time will tell.
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I’ve started using Pear Budget as well (http://www.pearbudget.com). It’s currently a free Excel spreadsheet that is simple to use.
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I have a spreadsheet that I use for tracking my finances. It has a macro for adding transactions which interprets the words “today” and “yesterday” into the correct dates. If I don’t enter all my transactions within two days, I end up having to search all of the receipt for the date. (Why is that no two stores seem to have the date in the same spot?) Not very sophisticated, and not much motivation, but enough that I usually do it pretty much every day that I spend money.
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I fire up gnucash every nite. Works for me. You just have to start doing it
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I’m living paycheck-to-paycheck. I have an excel workbook for keeping an eye on my money. On one worksheet at keep my bank balance updated and keep track of the bills I have to pay before the next month. On another worksheet I record DAILY my non-bill expenditures. Writing down EVERYTHING and keeping it up-to-date with my account balances helps me focus on the big picture.
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Successminders.com has a little foldable pocket record-keeper for finances that may help some people: http://www.successminders.com/index.php?s=Filo
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I track every penny in Quicken, even cash. I can tell you exactly what I’ve spent since 1999.
My spouse, who tracks nothing and has a pile of AmEx bills on the coffee table he’s been meaning to reconcile since April, derides me for focusing on “little things” when I should be focusing on the “big picture.”
[sigh]
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I no longer live paycheque-to-paycheque!!
I have a spreadsheet that has three tabs — projected cash flow, actual cash flow, and daily expenses.
Open it every night, take out receipts from my pocket and enter them in the daily expenses. (Get receipts for EVERYTHING… cash, credit, debit, EVERYTHING! If it’s not possible to get a receipt, don’t buy it [eg: hot dog stand]). Get a total for the days expenditures, and enter that into the Actual Cash flow sheet for that current day (or, if you wanted to get really technical, categories the totals)
I’ve saved $2000.00 in three months so far (i only make $800.00 bi-weekly, and i’m a smoker to boot!)
When you *see* what you spend, you can curbtail that spending. I used to spend $30.00-$40.00 a day just on ‘eating out.’ (ohhh, those crazy bachelor days!!), and found that’s where most of my money went ($30.00 x 14 = $420.00 biweekly, on a wage of only $800.00 bi-weekly!!). That’s the first expense i was able to actually see, spend time being discusted, then I fixed it.
Next up — those expensive cigarettes! Wish me luck!!
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Back when I was a young lad, I’d come home from a week of dinosaur hunting and put the needed cash into an envelope for forthcoming bills. Rent of $450 meant I needed to drop $112.50 in the rent envelope each week. Ditto for the average utility bill, grocery expense and so on.
I had the envelopes punched for a 3-ring binder.
It was simple, easy to see if I was on-target or not and it helped me get out of debt the first time. I would put away what I HAD to have to pay my running expenses, put a few bucks in my pocket for gas and meals (I packed lunches but would get a soda or a snack when I wanted one) and drop the rest into knocking my debt down.
I didn’t stay that way because I never did get in the habit of saving, so ‘rainy day’ expenses always caught me flat-footed and needing to borrow.
I like the advice of dropping 10% into savings before you even contemplate the rest of your expenses. Too bad I’m so rotten about following it.
The same system works just as well for collecting receipts.
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