Machines are, in some respects, much smarter than we are. Specifically, their ability to collect data about us far outpaces our own ability to know who we are and what we do.
Your computer can't tell you why you eat, spend money, sleep, or watch TV. But it can tell you with much greater accuracy than your own memory the minute, often embarrassing details of when and how you do those things.
Any regular reader of this blog is familiar with the importance of tracking the money that moves through your life. It's the first principle of many money gurus, and a nearly religious commitment for some of us who do it (myself included).
Why? Because it works. A wonderful recent article in the New York Times explores how personal data collection about any activity is a powerful tool for change. The author, Gary Wolf, looks at people tracking everything from their money to their drinking habits to the minutiae of what they do every two minutes.
A lot of these people are extreme geeks. But we normal humans have taken up personal record-keeping with new zeal since smartphones and social media have made it so darn easy to not only collect the data, but also to search it for useful information.
People are using the power that technology puts at their fingertips to track details about their lives like:
- how they spend money
- how much they drink
- what they eat and when
- their exercise habits
- their sleep
- everything they do
And a variety of other things. Really, you can track anything you want to understand better.
Having that data at our fingertips is life-changing for nearly everyone who succeeds at keeping the records. Records tell you what you have done, not what you wanted to do, or meant to do, or are afraid you did. They let you answer the question, “How do I spend?” or “How do I exercise?”or “What do I do all day?”
In addition to helping you answer questions, tracking your moods and habits can help you answer questions you haven't thought to ask yet. When you see parts of your life recorded on a graph, you notice things you might have otherwise missed. Wolf likens this to finding a dollar on the street and picking it up. There are all kinds of patterns in our lives that go unnoticed.
I certainly collected a lot of dollars that were going to waste when I started tracking my spending. In addition to highlighting areas where it was easy to cut, tracking my dollars let me see how much more I was spending in some areas, like groceries, than I thought I was. It gave me a direction to focus my frugality in.
The other great thing about collecting your own data is that it is so personalized to you. By tracking your spending, you can see how small changes in health, stress, or mood affect your spending habits. Tracking your concentration might reveal that a particular supplement works well to help you focus, while another doesn't do much.
Tips for tracking
As Wolf acknowledges, though, data collection is only as good as the analysis you bring to it. Technological tools can open up new worlds of insight about how small changes affect our lives, but we need bring our very human perspective to reading that data.
Perhaps the most important piece of this is to regard the naked data about our own lives with gentleness rather than judgment. The emotional roller-coaster of blame, shame, and worry can drive you right away from tracking your spending, your eating, your exercise, or any other activity you want more information on. If you're afraid of the answers, doing the relatively simple work of recording your activities can be painful and useless.
Here are a few suggestions to handle the emotions that come up around tracking an emotionally challenging topic, which money is for many of us:
- Make it easy. There are a lot of great programs out there that let you keep track of your income and spending with the press of a few buttons. Pick one you like, or go old school with a stack of index cards. Experiment a bit and choose a method that works for you.
- Set aside time to look at what you've tracked. Put aside an evening to go over your spending records. If you have a spouse or partner you share finances with, make a date to do this together. Aim to be rested, fed and relaxed when you sit down to the project.
- Breathe. Seriously. This stuff is stressful. A few deep breaths will help you stay calm and centered when dealing with it.
- Put aside judgment. It can be challenging to look at your money history without judgment, especially if you've been spending in ways you regret. But what you have when you look at those transaction records is just information. Approaching it with gentleness can help you accept yourself in all your parts. Then you can figure out what changes will really work for you.
Looking into the mirror of your personal records can be incredibly stressful. For example: I think of myself as a non-shopper. But the truth is that I drop a few hundred dollars every couple of months on clothes, books, or household goods. It's not a lot of shopping, but it can be stressful to see those blips on my spending charts.
The trick to handling it, for me, is to take a deep breath and remind myself that this is just information about who I am. I buy more Stuff than I care to admit. Pretending I don't — or beating myself up for doing it — won't make it better. But I can add some shopping money into my regular budget and then feel happy when I don't spend it, instead of stressed when I do shop and spend money earmarked for something else.
This is the human angle: Am I asking my spending chart, like a magic mirror, to tell me who is the frugalist queen in all the land? Or am I using it as a map to gently show me where I tend to wander when I'm opening my wallet, so I can chart a more intentional course?
Journaling adds juice
The raw data could do either. I need to ask the right questions to make tracking my spending a useful, healthy practice. Without my perspective, it's just a frightening wall of numbers.
Maybe the best way to make data-tracking work in your life is to add personal journaling to it. Study after study has shown that personal journaling can be therapeutic. Instead of merely recording your spending, take twenty minutes a day for a week and write down your innermost feelings about money, debt, and your financial situation.
A study by James Pennebaker at the University of Texas in Austin found that mid-career professionals who were laid off from their jobs had better luck in their job searches if they wrote freely about their feelings about the layoffs. Simple record-keeping of job-hunting activities was not nearly as effective as journaling, though both activities were more successful than doing neither.
Tracking your spending, or any activity you're motivated to change, is key to successfully shifting your life habits. Journaling about the things you want to change, in addition to tracking them, can help you look more deeply and gently at yourself. Through your journal you can learn what questions you need to be asking, and then turn to your data for the answers.
J.D.'s note: I'm a huge advocate of using data-tracking to change habits. This method helped me diagnose (and recover from) compulsive spending. And I'm using this same technique right now to lose weight. I record everything I eat and every exercise I do in an effort to document my habits. This makes it easy to see when I'm going off course. As a result, I've lost fifteen pounds this year, including five in the past month. Photo by ansik.
Author: Sierra Black
Sierra Black has spent most of her life broke, no matter how much or how little she earned. She started turning that around two years ago with some radical life changes like moving, shifting careers and committing to buying nothing new.
Sierra and her family live in the Boston area. Sustaining a family of five on one salary has led to some creative frugal maneuvers over the years, especially living in an expensive urban area. Sheâ€™s learned how to make a $1 family meal, cut her heating bills in half and save thousands of dollars on travel, clothing and fun.
When Sierra isnâ€™t working magic on her familyâ€™s finances, she writes about personal finance, sustainable living and parenting.