Track Your Spending

Are you keeping track of the money you are spending every day? Why not? Do you think you’ll remember the coffee, the magazines, the candy bars, the bottles of juice, the lottery ticket, every time you pop over to the supermarket, the parking receipts along with and the myriad other things you dip into your wallet for every month? Research shows that mental math doesn’t work. Writing it down does.

Time to start a spending journal. The idea is to have a real-time reflection of your real-time money activity.

At the top of the first page, write the amount you have in the bank. As you go about your day, collect receipts for EVERYTHING you buy. Whether you use cash, debit or a credit card, ask for a receipt. When you get home, sit down and make your spending journal entries.

Every time you spend a penny, you deduct it from the balance.

Every time you get a penny, you add it to your balance.

Your spending journal will look like this:

June Balance
Credits Debits
Pay 3,274.00 3,274.00
Mortgage Payment -1,543.00 1,731.00
Insurance -122.36 1,608.64
Emergency savings -100.00 1,508.64
Car loan -375.00 1,133.64
Debit: Groceries -86.72 1,046.92

Not only will your spending journal keep you in the know about how much money you have left in the bank, it’ll keep you conscious about what you’re spending. It’s so easy to just whip out a card and – cachunk cachunk – charge it. If you aren’t tracking your spending, you may find yourself facing a credit card bill that’s higher than you can afford to repay come the due date.

According to a study published in The Journal of Experimental Psychology, “…using a less transparent form of payment such as a credit card lowers the vividness with which one feels that one is parting with real money, thereby encouraging spending.”  However, if each time you use your credit card, you write what you’ve spent into your spending journal, and deduct that money from your bank balance, you’re much more likely to stay real.

19 Responses to “Track Your Spending”

  1. I had originally thought that the spending journal was for all of the “other” spending we do outside of the stuff that we regularly budget for….but I guess I’ve learned something new today. For example, I thought that things like “insurance”, and “car loan” like what we see in the example above, did not regularly go into the spending journal since it is part of the “jars” and savings that is done…..I had thought that you track only the items such as “Food” or “Entertainment”, or “Transportation” as general categories… me, the spending journal is more like my budget spreadsheet that I have at home…..the part that I’m terrible at is tracking the smaller spending such as Food items, Entertainment items…..things that are smaller in amounts that seem to trickle away the funds!!

  2. I am from the generation that did not have debit cards for the early part of our marriage. You either paid cash or wrote a cheque. I guess we had automatic withdrawal, but not sure about that – I think we wrote post-dated cheques. I have always kept track of our chequing account and for a few years have written down my own spending of cash-made it easier than always trying to figure out where the money went. I always balanced my cheuqing a/c at end of month as well. Now I write down what I spend out of jars also. Sometimes my husband laughs at me when I go crazy if I am out in my deductions – he doesn’t keep track of his money (cash). Being obsessive -compulsive about some things helps in this situation. Also writing it down makes me not spend for a coffee etc. as I can’t be bothered writing it down.

  3. I think it is even more important than ever to track your spending. There are so many “convenient” ways to spend with debit, credit, etc that to have a comprehensive, simple system to know what truly is coming in and going out is vital.

  4. I handle the spreadsheet but we both make sure to get receipts for everything and put them right beside the computer so I can input the spending every night.

  5. Debbie,

    Obsessive/Compulsive is good sometimes, but don’t tell my hubby that.

    I started the spreadsheet, jars and tracking….and after about a year he got interested and ‘invested’. Now he and his OCD engineering/detail oriented mind have tricked out the spreadsheets. We have spending documented, savings forecasted, debt paydown schedules…..and they are all to the penny. (Mine were to the loonie(ish)). Love it!!

  6. I’ve started using the app ‘Cash Journal’, it wasn’t a free app unfortunately, but I love the convenience of having my spending journal on my phone. I can break down by type of transaction and account making it easy to track the balance in each category/account. I broke my “Food” category down by Lunches, Treats and Actual Groceries, its crazy how fast Lunches/Treats can take over my food budget when I’m not paying attention. Now that I’m on the ball, its easy to keep under control.

  7. Oscar, I think the point that Gail is making is that you need to actively track what you are spending your money on. I think that how you do that can vary depending on what you have set up. For example, I maintain a spreadsheet that includes my income and all of my fixed expenses (including savings and amounts put away for annual expenses). What is left is my discretionary spending. Whether I pay by cash, debit or credit card, everything that is discretionary is tracked in my “budget binder” (which is actually a small notebook that I carry everywhere with me). Some people may not have a spreadsheet and find it better to track everything in a budget binder. Whatever works for you and gets you to the goal of knowing where all of your money is going – that’s what’s important.

  8. I am probably old fashioned but I have always used the little booklet (now singular) that comes with the checks to track all the money out of my checking account, be it checks, debit transactions, automatic payments or cash withdrawals. When my pay comes in I add it to the balance and I immediately enter all the transactions I know will happen until the next pay check.Then I know what I have left and every time money comes out I write it down. I used to get these booklets free at any branch but recently was told we do not have them any more you do not need them: money will be transferred from your LOC! So now I have to buy them and order them by mail! The only thing though it does not record cash (I just get receipts) and credit card charges… I have to keep track separately.

  9. Genevieve, I do exactly the same thing, and find it very effective. I get paid once/month; I immediately pay my utility bills and subtract all expected debits (mortgage payments, property taxes, transfers to RRSP/TFSA/planned spending accounts) immediately, so I always know how much is left for variable spending for the rest of the month. I’m sorry to hear that your bank has ceased to provide cheque registers… I hope that is not a general trend. I am still able to get them at BMO. Do people really not balance chequing accounts anymore?

  10. Instead of a “journal,” I use a spreadsheet that includes two columns for each category: Budget and Actual Spending.

    Every month’s sheet looks the same, same layout, same categories, and the budget figures are mostly the same every month — but the Actuals can vary widely each month.

    I also have a fourth column where I can add up the totals for each category for the year, typically on the December sheet.

    Plus, I love how I can compare years, and/or go back in time really far to see what I spent on certain categories or items. It may sound crazy, but I love tracking my spending 🙂

  11. I have a three column ledger that I use to keep track of everything. Bills are paid through the bank directly from my checking account. I keep all of my accounts updated and get a receipt for everything I can. If I spend in a place and can’t get a receipt I write it down and document it in my ledger. I try to come in under budget and since I live alone I am responsible for everything. If I make a mistake it is my own and I try to correct it. I think whatever works for you is how you should do it. But you have to be consistent with it in order for it to work.

  12. There’s a certain irony in the fact that credit cards are the source of so much evil for some people yet I use my VISA bill as my spending journal. I put everything on the VISA and log in everyday to keep track of what I spend.

    Credit and debit cards should make it easier to keep track of what we’re spending money on. I’m well aware that this clearly doesn’t work for some people, just pointing out the irony of it!

  13. I think that all the responses above show that it is not how you track your spending but rather that you consistently monitor your expenses. And no I don’t think that it is crazy to enjoy tracking your spending. It drives my wife crazy but I secretly enjoy holding big banks, food conglomerates and grasping service providers at bay.

  14. I’ve become slightly obsessed with tracking my finances… I use a program called YNAB (You Need A Budget), which has quite an apt name. Having a tool like that available to me has made my debt repayment so much easier, because I know where every dollar is going! It’s almost restricting at times, making me question even small indulgences, knowing I’ll have to justify it somewhere in my budget. Budgeting works. It really doesn’t have to be a complicated process – as Gail has shown with her Jar system.

  15. Starting from the beginning of the year, I’ve put together a spreadsheet of where my money went using downloaded bank data for my checking, saving and credit card account. It’s been a good experience; Unfortunately, the category of “ATM withdrawal” is a big black hole representing cash spending that’s not very helpful to me. Like Beckie, I will find an app to help make the tracking of cash spending easier.

  16. I guess we are luckier now that we have our mortgage paid off and have some wiggle room in our budget. We track most everything by receipt or debit/credit card statements on excel sheets. We each get $20 a week for pocket change which is used for little things like a pack of gum or parking meters. We don’t keep track of this money. All our coffee cards are on auto load so I know what goes on them. We have a set limit for spending like this as well. My other half refuses to track stuff like that so this method stops the disagreements. When money was tight we were not spending without tracking everything. I think if we did not count all the pennies we would not be where we are now with our finances. We found the hardest thing was to delay purchases. Usually after a couple of days we realized many things were wants not needs.

  17. I did my first retrospective budget in fall of 2011 for a work exercise, using the “Build a Budget That Works” tool. Not wanting to pull numbers out of thin air, I used actual bank and credit card statements (year of data for fixed expenses, one month for variable). That served as a guide where I wanted to be.

    After repeating in 2012 (that time a 4-month retrospective), I felt it was time to journal on a regular basis. I started in January 2012 with the same budget template, with added sheets. One for cash, one for debit card, and one for credit card. And when the month was over, new workbook. By the end of the year, I was able to combine the 12 cover pages to give a yearly average and see where everything was going.

    While it was easy to maintain, it was still time consuming. And I am not aware of any free/open source accounting programs that suit my needs (easily transform statements, report based on Gail’s categories).

    Early this year, I rolled my own. I created a database that allowed me to paste in my statements, key in cash, categorize each item, remove unnecessary items (such as account-to-account transfers like paying off a credit card – the credit card purchases are already accounted for, why count them both/three times?), and report based on the familiar budget sheet. I can now input once a week as fast as it takes to log into my banking and pay off bills.

    The design is very custom to my needs (e.g. everyone’s banking statements are set up different so what pastes for me may not paste for you), but it works very well. And it balances my money OCD with my time OCD. 😉

  18. avatar Tammy saxida Says:
    May 17, 2017 at 11:52 am

    Dear gail.I am a recently separated from my husband and want to make a good life with my children.I want to purchase a spending journal like I see on money moron.pls and ty.yes my ex was a huge money moron. He would take from his credit card to put in an rrsp. I explain to him it’s not worth it cause he has to pay interest on the credit card .I am on my own and want to show my children we can do things and have nice things. But not all at once.I have about one thousand in debt My credit is good and want to keep it yhat way. Waiting to here from you ty vm

  19. What the heck is cachunk cachunk?

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