I’ve been tracking every penny I spend since October 2017. I plan to continue to track my spending for the foreseeable future. If you’re reading this, you probably have some interest in personal finance and improving your own money situation. My husband and I have been on the path towards home ownership since September 2017, when we attended a home-buyer seminar. That launched our diligent spending tracking, which we have kept up, despite our hectic schedules and planning our wedding (we got married in July). Tracking our spending as individuals and a household has been transformative—here’s what I’ve learned.
It keeps you accountable—for the big things and the little ones. Knowing that I will have to write my purchase down and share it with my spouse really and truly does keep my impulses in check. I’ve still made some questionable purchases and I still spend money on frivolous things sometimes, but by and large, if I know it has to come from money I don’t even have—I won’t spend it.
It helps you be more transparent about money with your partner. My husband and I each have notebooks we organize and track our individual bills and spending, and we enter all of this info in a spending tracker, which at the end of the month gets entered into a budget spreadsheet. Whew—it seems like lot of work, but it keeps the money fights to a minimum when you know exactly what your spouse is spending money on and what their ins and outs are each month. Unifying our finances and being fully transparent about money have brought us closer and given us a firm foundation for our new marriage.
It gives you framework to build and adjust your budget. Tracking our grocery spending, for instance, gave us our monthly budget for groceries: $300. Now we are always shooting to come in under that each month. We’re not perfect, but we tracked what we spent for a few months before setting our goal. If you track your grocery spending and realize you’re spending $800 a month for a household of 2, you may need to tweak your shopping habits to fit more neatly into your budget. It can be shocking to see all of those little trips add up, but so crucial to know where that cash is actually going.
It helps you identify annual expenses or bills so you can budget for them. I was caught off guard by my annual New York Times subscription renewal in January ($143) my NatureBox membership fee in June ($50) and my Amazon Prime membership fee ($119) in October. But now I know! Going forward, I can work these items into my budget, and knowing they are coming helps to minimize any disruptions to my cash flow.
It helps you stay grounded with your charitable spending and gift-giving. I’ve found it’s very helpful to monitor what I’m actually spending on gifts. It’s really easy to derail my budget, one “small” gift at a time. I’m a pretty generous person considering my income level, and tracking these categories have helped rein me in when I need it the most!
It gives you a sense of control over your financial life. I think my biggest money problem pre-tracking, pre-budgeting was a lack of control, and that was due to a lack of information. I didn’t parse out what was due every month, when bills were due, or what I was buying. I also didn’t have a clear goal in mind until we decided we needed to be more prepared to buy a home someday. I flew by the seat of my proverbial pants for a long time, and while I had a good credit score, that was about it. I was pretty clueless without the raw data I’ve gathered in the past year. My financial house has only benefited from the habit of tracking my spending, and I have no plans to stop tracking. I actually find it a comforting and healthy habit, one that I know is helping us work toward our long-term goals.
What do you think about tracking your spending? Have you done it? Do you plan to? If you have, what did you learn? Please share in the comments!