How I Track My Spending (Finance Fridays)
Welcome to the first installment of Finance Fridays! This week, I'm sharing about how I track my spending.
Prior to this month, I tracked my spending to correspond with my paychecks. I get paid biweekly. So after payday, I allocated my check to different categories for the next two weeks. Every few days, I reviewed my transactions in my bank’s app on my phone and write the transactions in my spending log. I also track my spending monthly by reviewing my monthly statement that I receive from my bank. As a paper planner, I find it easier to review my statements on paper. I can highlight purchases in different categories and see any spending patterns I’ve developed over time.
Despite this tracking, I don’t always meet my spending goals. Although it is helpful to track spending to correspond with my paychecks, this method did not help me stay aware of any overspending.
I have six figures worth of debt, 98% of which is student loans. Will I ever pay them off? To be honest, I don’t know. BUT I do have other financial goals that I want to achieve, like paying off all consumer debt. So tracking my spending is important to me.
Changing My Tracking Methods
Here’s what I want to do differently:
1) Track spending daily. I hope that by tracking my spending daily, rather than weekly or even biweekly, I will be more aware of my spending habits. It’s easy to budget $15 per week on for coffee but not check-in with myself. By the end of the week, I’ll be $10 or $15 over budget. I have spending log inserts in my A5 planner, so I can track my spending there. However, I’ve seen people track their spending on a monthly calendar! There are plenty of tracking options with planners.
2) Carry cash envelopes and review receipts daily. Can I tell you a secret? I really don’t like carrying cash. (Isn’t cash dirty?) I typically carry $20 of emergency money. Otherwise, I prefer to swipe. I’m hoping that cash envelopes will help me limit overspending in certain categories, like grocery shopping and clothes. The only downside to carrying cash envelopes is losing it. I tried carrying cash envelopes in the beginning of 2020 and lost an envelope with money in it. I haven’t tried cash envelopes since then! (Read Dave Ramsey's explanation of cash envelopes here.)
3) Check in with an accountability partner. I love shopping, okay? I mean, really, really love it. Shopping is relaxing. I prefer to shop in person but my online shopping habits can get out of hand QUICKLY! I’ll go online for one thing and will suddenly have three different order confirmation codes in my email. My goal here is to designate an accountability partner I can call or text PRIOR to shopping online. I also want to check in with this person periodically to discuss progress on my financial goals.
4) Turn on notifications for the bank’s app. My bank’s app on my phone notifies me for certain activity on my account, like a deposit or a suspicious transaction. The bank will also send messages for other activity too, like all transactions.
I’ll be honest — I don’t think the notifications will stop the initial spending splurges during online shopping. But perhaps the notification of the first purchase (okay, maybe the second) will be enough to knock some sense into me.
How do you track your spending? Leave some tips in the comments below!
Be sure to check out the other volumes of Finance Friday here!