Tracking Expenses

The Key To Freedom 

Tracking is one of the four pillars of debt free living. It is the most important because the others feed off its results. The other three are, Setting Goals, Cutting Back, and Money Education.

Each day we make hundreds of choices. Tracking keeps a record of those choices. To do this, you need a way to keep a record. You have your checkbook register, and now you need a cash register. You’ll use both of these as you track your expenses.

The Best Buck You'll Ever Spend

The best dollar you will ever spend is for a small book with lined paper. Spending this one dollar will save you hundreds. Go to an office supply store, and pick one up. It should measure about 3"X3 ½”,  just the right size to fit in your pocket or purse. In this book you will record all of your cash purchases.

This is easy. There are no columns, no categories. Just write the day of the week along with the date at the top of the page. You are now ready to track.

Be Consistent

Every time, yes, every time, you spend any cash you need to record it. Put it in your little book on the date of the purchase. It does not matter how large or small the amount. You must write it down. You need to keep track of every penny that passes through your hands and this is how you do it. Whatever you buy, gas, newspaper, candy, doughnut, coffee, soda, or anything,  you write down the item and the cost.

This will seem like a pain at first but you must record everything. Do this for thirty days. You will then be able to do two things. Plug figures into your budget from your spending, and begin to see where you are wasting your money. Do this for three months and you’ll have a very good record of how you spend your money and any bad habits you need to address.

When you sit down to begin forming  your budget, you will have the figures from your checkbook, your credit card statements, and your cash expense tracking book. There will be no holes, no wondering where the money went. You should be able to account for every penny. Money is a very personal subject. People lie to others about it, and lie to themselves as well. Tracking helps to take out the “fudging.”

Other Benefits

You’ll soon see other benefits from forcing yourself to write down every bit of cash you spend. The flow of cash through your fingers will slow. You’ll cut down on your impulse spending. The fact you must record everything will cause you to think about every purchase. You will stop some spending just because you don’t want to record it.

This exercise will work wonders for you. It will free up cash you can put toward your debt or savings. This is money you already have but has lost “track” of where it went. This will allow you to do more with your money. Put tracking to work and do it now.