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Sunday, May 8, 2011

A spending diary

By Aurora @ Island Dreaming



Recently I have gone back to recording all of our expenditure in a diary. At the end of every day I list all amounts spent, along with how (card or cash) and what they were spent on. I also have a tick column for whether or not the expenditure was budgeted for this month. All receipts are kept and gone over too; and mental slaps on the wrist given where I know we could have been better.

As the weeks of records build up, I can see a pattern emerge of when I am most likely to spend money and what on. I have the information I need to tweak our budget - I can see the areas where I am being overly optimistic and also the areas where I could trim a bit more fat. Flicking back over last year's entries, I can see that almost every time we went into town to run errands, we ended up eating out; and quite often not particularly frugally or greenly. That expenditure is now for the most part gone - because seeing it written down and tallied up the last time made me change my mindset. The diary also tells me that four years after first promising to change my habits, I still spend a ridiculous amount of money getting to and from work and buying food when I am there. Not so good.

The prospect of having to write down every last expenditure and then deduct it from the remaining budget each day has already made me unload one online shopping basket and put down several impulse purchases in the local shop. In short, it has made me very conscious of how I use my money and just what I am consuming. Every expenditure represents the consumption of energy and resources and usually the creation of waste in one way or another; and being confronted with a long list of 'stuff' that we didn't need is as galling as seeing a large sum of money that didn't need to be spent. Money also represents the investment of time and energy that we made to earn it - something else that I don't want to fritter away. 

A spending diary, even if you only manage to keep it for a week, is enlightening and you will probably be surprised at just where the money goes. Spending money is not a bad thing in itself - but it is better to spend it consciously, in line with your priorities, than without thought.

Have you ever tracked your daily expenditure? What did you learn? Did you change your habits as a result?

13 comments:

Liz said...

We're back to doing this at the moment as well. It's absolutely the best way I know of tracking down those little leaks in a current account that make you reach the end of the month wondering what happened. For me, it's showing up a few things that I need to make room for in our budget.

Julie said...

When I was really struggling as a single Mom with several low paying jobs I read "Your Money or Your Life" by Joe Domingez and Vicki Robbins, which advocated this technique for tracking your money life and then builds from there. I am now 59 completely debt free, retired, own the first "new" car of my life, live in a smallish house I designed and had built and know how to live on very little without deprivation. And I still write down everything I spend, can't seem to stop....

notherethenwhere said...

I do this too. It works well for a few reasons. As was said already, it helps me see patterns, and makes it easier to identify and stop them. I also find that it helps make me reluctant to spend on things that I know aren't necessary, since I know that I'll have to record them and that they'll be there in black and white.

I've also started making myself more accountable by posting everything that I've spent on my blog at the end of the week, so it's not just there for me to see, but I'm also accountable to other people.

Willo said...

I track mine daily in my planner. This keeps me accountable and keeps our budgeting easy.

africanaussie said...

I made up an excel spreadsheet with the budgeted amounts in one column. As we enter our expenses we can see how close the budget we are, by month and by year. very enlightening and yes it does make you real about your spending habits.

Hilde said...

I have done this since I was married - 36 years today! It would not be "necessary" now, but I still like to seee where the money went. And it is so much fun to have a look into the old diaries. The prices there are shocking, but only I see what we earned.

louisa @ TheReallyGoodLife said...

I've kept a spending diary since the start of the year, in an old paper notebook. I tried various online/spreadsheet methods but found a pen and paper works best for me.

It's made me more conscious about what I'm spending in the first place (knowing if I buy something ridiculous I'll have to record it) and shown me how quickly little things add up.

I wish I'd started keeping one earlier!

Dea-chan said...

I'm using a spreadsheet and trying to use the cash method -- the problem is getting my guy to remember to bring the cash!

I mostly use the spreadsheet because, as I'm paid hourly, I also have a column for how many hours I worked and what tips I made.

I KNOW that our expenses are eating out. That's not the issue. :-P

Jason Dingley said...

We have started to keep a graph. It provided great instant feedback on progress.

Aurora said...

The diary is becoming a little obsessive for me now, it is so useful. I think keeping one of the first pieces of advice that I would give to anyone starting out at being more frugal.

From a personal point of view, it is also interesting to see how I have changed over time. It is amazing to see what my spending priorities were a year ago compared with now. I wonder 'how did I justify THAT?!'.

Hilde - never thought that this has a social history element to it, but it is certainly another reason to keep one.

Suzanne with Laughing Wallet said...

I started keeping a log years ago - just a simple tally on notebook paper, and to this day, I keep a simple hand-written budget active at all times, where I write down everything I spend. Like Julie, once I got started I couldn't stop!

And you're so right. Once you're accountable for everything you spend, even if just to yourself, you think a lot harder about forking over the money. It's kind of like being on a diet and counting calories: "Do I really want to have to log this hot fudge sundae in my diary??"

Bron66 said...

I've been keeping a spending diary in one form or another since I got my first job (in 1985)I have found using an ordinary dated diary is the best and I divide each day into 3. Money in, money out and notes. Since I've been a single Mum I have been even more obsessive about it, keeping receipts for even the smallest purchase and entering them into the diary. People think I am a little strange, I thought I was the only one! Nice to see I'm not.

CK said...

I'm lucky, here in Canada there's an amazing website that does all of this for you! Mint.com (you may also be able to access it from the states)

Basically you put in all your banking details and, with it's relationship with banks, it automatically updates everything for you. You then can go through your purchases and set up what they belong to (ie: PetroCanada = gas). From there on out it does it automatically for you every time there's a PetroCan receipt. It can take everything from credit cards to debit. You then set up a budget (ie: $100/month for gas) and it will show you through the month how much you've spent and how much you have to go.

It's AMAZING! And great for people like me who will never take the time to manually input everything!