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Day 2) How We’re Tracking Our Spending

Welcome to Day 2 of Where’s My Money Going? Month! This February 2009, I’m challenging readers (and myself) to track spending manually for 28 days. Don’t worry if you’re late to the party, better late than never.

So I’ve committed to tracking our spending manually this month. There are a lot of good methods for tracking spending and even ruling out automatic methods I still had a lot of options to choose from. I could go as low-tech as a sheet of notebook paper or as high-tech as entering all the information manually into Quicken. I chose the middle road.

Gathering Spending Information

To start, I’ll be getting the information about our spending from two sources. First, I’m saving all receipts and asking my husband to save his, at least for cash purchases. We’ll put them in an envelope on the bookcase by the kitchen. Second, I’ll double-check the transactions with our online banking. I’m committing to put aside 10 or 15 minutes in the evening…easy enough to do during a tv show if one is careful…to record all that day’s data.

Logging Spending

I’m going to be tracking spending in two different programs. First, I’ve adapted the free [download#8#nohits] to include a spending log ([download#12#nohits]) at the beginning. The idea is that I can track each purchase and then assign them to categories in the budget I’ve outlined. I’m focusing more on the spending patterns this month than the budget itself, but I still want to have it there to shape things.

If you want to use either spreadsheet but don’t have Microsoft Excel, just get the free Open Office suite.

Over the last year, I’ve had a number of friends (including some who aren’t PF bloggers and don’t read PF blogs) recommend the You Need a Budget (YNAB) program. It has a similar layout to my updated [download#8#nohits], except that when you record purchases in your spending log (register) they automatically show up in your budget as well (you have to create the budget first). I haven’t had much luck with the budgeting parts of Quicken and Mint, so this excited me.

So I’ve decided to do a trial of YNAB Pro and see whether I like it more or less than my spreadsheets (it looks and acts rather like a very pretty spreadsheet, which I like). I think doing them at the same time will prove a good comparison. YNAB Pro has the functionality to import downloaded transactions, but I won’t be using that right now.

I considered the parallels of using YNAB basic, which is essentially an awesome spreadsheet. It’s like my budget spreadsheet on steroids, but good steroids, the kind that make you get over whooping cough. But I think the Pro software is even easier to use and has more options.

I’ll be reviewing YNAB later on this month, along with Quicken, Mint & Quicken Online, Gnu Cash, etc. While getting set up, I was very impressed by the philosophy of YNAB and the in-depth tutorials they offer.

This post was part of Where’s My Money Going? Month. Tomorrow, I’ll post a reader’s story of how his financial tracking and budgeting needs and methods have changed over the last few years.

{ 11 comments… read them below or add one }

mb February 2, 2009 at 12:37 pm

I’ve just started to track my expenses in excel, how different is this from most finacial software? Is there anything that cannot be done in excel?

mrsmicah February 2, 2009 at 1:14 pm

mb, it depends on the financial software. Some (like Quicken) are very complicated. Other types of financial software offer some basic ways to record things and are pretty similar to Excel.

Excel can’t download and import transactions from your banks (which some software can). Otherwise it’s great for basic spending tracking and can be made to do some more sophisticated stuff if you’re good at it.

Diane February 2, 2009 at 4:08 pm

Just one question on this challenge – am I supposed to spend normally but track what I spend, or try to us this to control spending for the month?

I think both methods would be useful – 1 to determine what I’m generally spending money on and 2 to reduce expenses.

mrsmicah February 2, 2009 at 4:31 pm

Great question, Diane. Both are fine ways to do it. Spending normally will give you a good picture of your habits so you can find places to spend less at the end of the month. But if realizing that you’re tracking spending leads to less spending and more conscious spending, then it’s great that you’re making changes before the month is even out.

I think that as long as you retain and put to use whatever you learn about your spending habits (whether you spent or realized what you could cut out), then it’ll be a valuable month. 🙂 So I’d say go with whichever one you think will come most naturally!

Mary February 2, 2009 at 7:39 pm

I just discovered your blog & what great things you have on here. I’ve decided to join up with your tracking this month even though I’m a day behind on things. I’ve GOT to get things under control for myself even though I feel I’ve cut about every corner I can cut…but I’m sure I can find more. Thanks for the great insight & tips.

The Passive Dad February 2, 2009 at 8:20 pm

I’ve tried finding software to help track expenses and also wanted a way that my wife could have real time access as well. Since she has an iphone through work, I wanted to try and find a fun application she could use. Mint has been fun to use and track our daily expenses. I love this idea you have to track expenses for 28 days. Great idea…and can’t wait to check everyone’s status.

thisisbeth February 2, 2009 at 11:23 pm

I use YNAB Excel version, because I have an Apple computer at home, and use an IBM at work. I can carry my budget with me on a flash drive back and forth every day, so I can truly keep an eye on my finance. I’ve been tracking every dollar since October, and it is very helpful. This fall my spending got out of control, but I can see exactly where it went awry and have been working on correting that since the first of the year.

mrsmicah February 3, 2009 at 6:50 am

Mary, glad you discovered it just in time to join up. Welcome! 🙂

Passive Dad, of the online tracking options, Mint has been my favorite too.

thisisbeth, I think it’s cool you carry your budget back and forth. That would be a real upside of using the spreadsheet version.

ColombianCoffee February 3, 2009 at 11:10 am

I use Mint and I love it. It ensures that I don’t forget to log something. I check it everyday and make sure the categorization is correct. I also love the ability to set up custom alerts ( for example, if I go over budget or have a large expense). We recently received an email from Mint notifying us of an interest rate change on one of our credit cards. We may not have noticed otherwise.

Chelsea February 3, 2009 at 7:22 pm

Hi @mrsmicah,

Great comments here. It’s interesting to see how different people approach tracking spending.

If you’d like any screen shots, additional information, etc., for your review please be in touch!

– Chelsea, Quicken Online

Denise Fisher February 3, 2009 at 8:47 pm

I have tried and tried to get Mint to work for me, but it just takes me ’round in circles. I have to enter all the data, security questions and then cross my fingers to see if it will work. Mostly it doesn’t. Occasionally, it will transfer the data from my account, but it never updates automatically after that. Which makes it useless to me.

My most helpful tool is a low-tech blend of a spreadsheet that I use for paying my monthly utility bills, credit cards, and other expenses. I print it out, then enter the information in pencil as the bills arrive, and when I can see that I have all the amounts entered, I use a calculator to determine the monthly total (and if I’ll have to do any “juggling”). With that, I go to my bank’s website and pay most everything online. (A couple of the payments are made through the creditor’s website, rather than through my bank, because the bank’s 5-business-day delay in making the payment cuts it too close to the due date for comfort – and I don’t want to be assessed interest or late charges because of my bank’s snail’s-pace technology).

It will be interesting to compare the techniques that others are using in this challenge. I might end up with a whole new system. Awesome!

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