A friend of mine recently asked me if I write down everything that I buy. She said she’ll try for a few days, but then forget or get off track. I completely understand. When I charged stuff, I would track what I spent out of my checking account, but I didn’t write down everything that I bought with my credit card. Now that I rarely use my credit card, not tracking all my money would completely freak me out. What’s needed is an easy system to write down your spending. You have lots of options from free to fancy, but I thought I’d share my very low-tech system.
Permanent and Portable Budget Sheets
I have two sheets each month. I used to handwrite the monthly budget, but now I cut and paste it off my blog (aren’t I fancy?). I print that out and have lots of white space to calculate what goes into savings and what gets sent to the credit cards. On this sheet, I also have a Post-it note where I track my snowflakes. Anytime I get a check in the mail or a deposit in my account, I write down the snowflake so that I’ll know how much to add to each credit card payment. The file folder with my budgets sits out next to my laptop so that it’s always handy.
For my “portable budget,” I use a small planner (yes, it’s kate spade. I can’t help it. I love her paper products!). The planner also functions as my wallet, so it’s out anytime I make a purchase. For each month, I write all my variable categories, like groceries, cash, gifts, eating out, and their corresponding limits on a blank page in the calendar. I tried doing it weekly for a while, but that got messy, so I like the monthly approach. Anytime I buy something or take cash out of the ATM, I write it down in the planner. Usually, I do so at the register, but if I’m in a hurry, I’ll do it in the car when I get out of the store.
Set Serious Consequences
To track your money carefully, you need to have consequences. I never watched what I spent on the credit card because it wasn’t that painful if I went over the limit. Somehow, in my brain, an overlimit fee isn’t too bad, but running out of money in my checking account is scary. Here’s where I trick myself. By transferring all extra money out of that account, what’s left is the bare amount for the month (I do give myself a $10 buffer). Knowing that if I don’t track something, I’ll screw up my checking account helps me stay focused! You need to set up a system that works for you: perhaps spending only cash for the week or transferring money. Find some approach that will scare you if you ‘run out’ of money, and you’ll be a lot more likely to watch what you spend.
Get into the Habit
Tracking every dollar doesn’t seem like a big deal because it’s become a habit for me. I know that I’ll pull out the debit card to pay for the purchase, and I know that I’ll write it down once I’ve paid for it. I also check my bank balance in the morning when I check my e-mail (thanks to Antishay for this tip!). That’s an easy way to catch anything that I may have missed along the way and make sure that I’m on track.
Give Yourself Some Wiggle Room
To track every dollar, allow yourself to not track every dollar. Stay with me here. I give myself a “cash” allowance of $20 each week. I write down the ATM transaction, but that’s it. That way, I don’t have to write down every pack of gum or subway sandwich. I also round up everything and save all my change. Sometimes, I use the change for a soda or bag of chips and don’t write it down. Just be really careful to keep the wiggle room small. I’ve adjusted it from $60 to $40 to $20 without noticing it over the past year. Somehow, whatever cash is in my wallet will get spent, so now I keep it at $20 and make myself account for the rest. Also, I only take the money out on Fridays. If I run out before that, I have to use change or pass on the small items.
Once you set up a simple system to track your money, it becomes second nature. Of course, I track it twice since I also account for things on the blog. As usual, I highly recommend journaling or blogging if you’re super-serious about debt-reduction. Taking a few minutes every few days to review what you’ve been spending money on also helps you stay focused on your goals!