Whether you are new to frugal living or have been practicing it for a while, creating a spending journal is always a good idea.
A spending journal allows you to see exactly what you are spending and the information it provides can really help you reduce that budget. A good spending journal keeps track of your purchases, with detailed information, such as when you spent money on something and even why.
If you are just getting into frugal living, a spending journal is a great way to start, because when all of that information is in front of you, you will quickly see how you can reduce some big chunks of change.
For someone more experienced, a spending journal can give you a jump out of your normal rut and inspire you to find new ways of saving or push you to go back to some tried and true ways of saving.
It is amazing how quickly little things add up, from a coffee or candy bar to a library fine or DVD purchase. Reviewing larger expenses, such as gas, might just inspire you to find a way to combine your errands, carpool or walk and bike.
You can create your spending journal on paper, such as a spiral-bound notebook or composition book. Or you can do it on the computer, in a spreadsheet, word processing document, etc. Just pick something that is convenient, so you can return to it all day long.
Some people like an actual notebook, because it is convenient to carry around all day. No one wants to whip out a laptop after buying some mints, right? Hmm, there you go, a computer can actually be a deterrent to spending, if you know you have to record every purchase right after it happens.
The nice thing about using a computer, though, is that it is easy to organize the data you are collecting. You can sort it to your heart’s content, allowing you to see patterns of spending more clearly.
When recording my purchases, I find it easiest to list everything by date. Take one week at a time. For each day, I record all of the purchases made that day, and I try to include short explanations, being as honest as possible. It is okay to write down “because I wanted it,” if that is the real reason for the purchase. Don’t judge yourself, just record. Then later you can do back and review your purchases. The most important thing is to be really honest. No one else has to see your journal if you don’t want them to.
We will get into reviewing your spending journal later. Check back here in one week for the next step in our spending journals, when we start our review.
Mary Ann Romans also writes for the Computing Blog here at Families.com where she shares everything from the latest news on technology to cool downloads and fun websites.
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