Get a Little Self Control: Track Your Spending

Perhaps not too shockingly, most young adults do not keep careful track of their spending. They've got no idea where their money going and as long as the rent and bills are paid, it doesn't seem to matter. My favorite excuse for this behavior was something along the lines of "I worked for it, I can do what I want with it!" Which, while entirely valid, isn't going to make anyone financially stable. Just barely solvent maybe, but not stable. A person could be $500 or more into overdraft (like I was three years ago), but as long as someone will give them cash for a paycheck it becomes easy to ignore a nasty, embarassing financial situation.

Tracking your finances can seem overwhelming, and if you're already in a nasty position just beginning to track them forces your head out of the sand. Denial is often more fun than having to look around at the hole you're in. Even if you're not in a financial pit, tracking your spending meticulously is enlightening. You're probably bleeding out money on unnecessary purchases without even realizing it.

Keeping an eye on your spending doesn't have to be an awful chore. It's not even hard, once you're in the habit. Here's my advice for making it a habit:

(1) Have at least one set time a day to record your daily spending. Pretty much everyone I know sits down at the computer for a while once they're home from work. Taking 5 minutes away from facebook or myspace shouldn't be too hard.
(2) Don't rely on your online banking transaction record to be accurate. Too often we just glance at our balance online and make spending decisions based on that. But the available balance may not be the actual balance, or transactions might take a few days to post, both of which can send you into Overdraft Land. (But you've got overdraft protection now, right?)
(3) If keeping a spreadsheet or a Quicken file together seems to boring or complicated, try keeping a journal a la Bridget Jones. Bridget would write about her day and at the bottom of her entries she'd keep of record of various personal statistics; cigarettes smoked, pounds gained/lost, and so on. If you're in the habit of blogging or bulletining on MySpace or whathaveyou, this shouldn't be too hard.
(4) If you can't keep a mental record of what you've spent, get a receipt for everything. Then, at the end of the day (or whenever you sit down to record your spending), pull out the receipts and consolidate the information.

Until this year, I never kept meticulous track of my spending. I began to obsessively track my spending on February 7, 2008. (Yes, it was that recently.) In just over a month, keeping careful records helped me to push my net worth (small though it may be) into the black and helped me to give myself about a $100 cushion in my checking account.



I'm not rich by any means, but I know exactly where my money is going. Recording my spending has put me in control of it, and I'm finally in a position to start paying off my random debts.