Welcome to Day 26 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, you’re still welcome to join. Consider tracking your spending into March.

After today, there are 2 days left in Where’s My Money Going? Month! So where do we go from here? Tomorrow I’ll be writing about turning your spending this month into a working budget. On Saturday, I’ll be talking in more detail about our month’s spending.

There are a few things we need to consider as we decide what we’re going to take away from this month. (I’ll cover the specific budgeting considerations tomorrow.)

First, how frequently are we going to track spending from now on?

I came into this month assuming that I’d probably track my spending a couple times a week from now on. It’s easy enough to track daily for one month…especially if you’re blogging about it every day, but I didn’t think I could keep up with that.

But now, I think I’m going to track my spending every day or every two days. I like being on top of things much more than I’d anticipated. I like recognizing no-spend days. I like planning our spending with debt snowflakes in mind. I’m much more excited about our debt snowball this month than I have been much lately.

For other people, tracking every day just might be too much and that’s fine. What matters is figuring out what you can keep up with and the method you like.

Second, what kind of tools are we going to use?

I’ve enjoyed the simplicity of You Need a Budget so much this month that I think I’m switching to it permanently. It’s not a highly-sophisticated tool, but I always felt overwhelmed by Quicken. And I appreciate its usability over my old-fashioned spreadsheet.

Other people like having total control of how things are laid out…in which case spreadsheets and even plain old Word-type documents are the way to go. And if Quicken doesn’t intimidate you too much…but I still haven’t figured out how to make a really good budget on it.

If you’d like to use YNAB yourself, go to this article and enter the giveaway. The YNAB giveaway ends on Saturday the 28th at midnight EST. I’ll announce the results in the first few days of March.

Third, what is going to be our focus?

I’ll talk a bit about goals in budgeting tomorrow, but I think that before we can even consider a budget we have to think about our focuses and goals. Our spending goals are twofold: 1) save as much as we can of the money we earn in order to pay off Micah’s student loans and 2) not be miserable while we do it. We may develop smaller goals of saving up for big-ticket items along the way, but we don’t have any right now.

Our goals are what they are because Micah’s got a LOT of debt and it’s going to take years and years to pay off. 5 years is a very optimistic timeframe. So we want to get it paid off, we want to get it out of our lives and done with. But we also know that it’s going to take a while. We don’t want to live entirely for the future, we could if it were maybe a year of privation until we got there but doing that for 5 years or more is unhealthy.

We won’t be taking world trips, going to Broadway shows, buying a second car (unless maybe we move somewhere w/o public transit and work in opposite directions), getting expensive gadgets, etc. But we’re going to find a healthy mix of meats with our beans and rice. We’re going to budget for going out with friends once a month and for occasional date nights. We’re going to put a little of the snowflake money (not the budgeted debt-repayment money, but the leftovers from the budget) toward end-of-the-month treats. Because we think that those little things will help make our life fun while we pay off the debt.

You may not have much/any debt, your goals may be saving for grad school or a new car, you may have debt that can be repaid in a couple years, you may want different things out of life. That’s all good, the point of personal finance is to find practices which help us meet our own goals and live our life with less financial stress.

This post was part of Where’s My Money Going? Month. Tomorrow’s post will be about using what you’ve tracked about your spending this month to create a budget that’s right for you.

{ 2 comments… read them below or add one }

Sandy February 26, 2009 at 12:32 pm

Oh my gosh it sounds like something we should all do but I have to confess a wee bit of pain at the thought. I have to follow how you did and see if I can suck it up and do this!

Maureen February 27, 2009 at 10:28 am

If you tell someone that you’re going to track everyday they may respond with, “Oh my gosh, how are you going to keep up with that?” However as you’ve mentioned it became easier to track everyday. I have maybe a couple of no-spending days (fewer than most) because I buy food everyday as the supermarket is near and I’m cooking for one so I need to carefully plan. My daily total usually come to about €5 which is reasonable to remember. At the start of my tracking I’d just generally list a food bill without the individual items and their prices which may be of help to some. I became dissatisfied with this though as I knew it’d be a deterrent when I saw how much exactly I spend on snacks. I like listing fruit and veg separately so that I know I’m getting my 5-a-day.

If you’re hopeless at doing it daily then make the effort to collect all the receipts and at the end of the day try to write down what you’ve collected. This is a good start to remembering your purchases for when you stop collecting receipts in future as you will begin to notice your spending patterns.

It’s also key not to lie to yourself. If you can’t remember exactly how much you spent on something go for a higher figure than a lower one. Even though neither is accurate it does mean that you not deceiving yourself into thinking you’ve spent less than you have.

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