Keeping a money diary to record your spending

I have problems with keeping journals. I start out with a lot of commitment on January 1st, or on the first day of a trip, or when something really exciting has happened, and end up with five pages written in a 195 page exercise book. Dear diaries just aren’t my thing.

So imagine my despair when I found that an important part of my savings plan was a journal. Not a confessional, soul-searching journal. This journal was to be more bracing and more invasive than love life dissection. A financial journal is where you record everthing you have spent every day. It’s the Liz Taylor to the Richard Burton of budgeting. Without a proper financial journal, you’ll have yourself a sub-standard budget and hamper your ability to save efficiently.

Luckily, they’re pretty simple things to start. The trick of them is to keep consistently making entries. Here are some tips on how to make a Dear Diary entry save you cash.

Be honest

Diaries are often exercises in self-justification. We omit the things we’ve done wrong, or soften our role in a situation so we look better. That can’t happen in a financial journal. Honestly recording what you’ve spent and where your money is going is fundamental to the success of the journal.

Set it out

A financial journal doesn’t have to be complex. It can be as simple as an exercise book with two columns and a tally of the daily spending down the bottom. What’s most important is that you set out every dollar you spend in a daily basis, and what you spend it on. You can also use one of the many online finance tools as your journal, such as this one or the aptly titled, Spending Diary. Both are free to use.

Get trendy

Once you’ve started entering figures and items into your financial journal, trends will start to appear. You’ll notice things that regularly crop up, like coffees, which you probably don’t need to spend money on. Work at eliminating that expense. Your journal should provide you with a list of all your unnecessary expenditure. Try to rid yourself of them one by one.

Get inspired

This article in the New York Magazine brings together 6 New Yorkers to keep a financial journal on their spending. It’s well worth a read to hear their experiences and what effect keeping the journal had on their savings plans. It’s voyeuristic but totally fascinating how other people spend their money.

Be consistent

The most important part of a financial journal is keeping it consistently. If you can maintain the journal over a month of more, then your budget will improve as you become more aware of where your money is actually going. Once your consciousness is raised about different expenses, you may become more loath to spend the money.

Get challenged

Bloggers who have struggled with debt suggest taking the financial journal challenge for one month. If you only do it for one month, at least you’ll leave your finances in better condition. Hopefully, you’ll end up with a habit that’ll last you a lifetime. Why not try it, and send in your stories about how much money you end up saving?

Have you ever kept a financial journal? Was it an effective savings measure?

Be sure to check out our budget spreadsheet if you need a way to track spending using visuals and comparisons!

Related Posts

• Does Saving Money Mean No Spending?

  Saving money should be long-term and sustainable. So how stringent should your savings measures be?

• Figure out your daily spending limit after expenses

  How I worked out my variable expenses budget – meaning ‘how much cash am I able to spend daily before falling behind’. Quite the eye opener and a handy way to become conscious of your spending again.

• The Financial Game Plan

  Money stress is a big downer. It’s easy to get worked up about our finances, to the point where we yo-yo. You’d recognise it once you saw it; yo-yoing between complete avoidance of all financial discussion or work and a frenzied schedule of strict financial control. A game plan of how to approach your finances, what to check, when to check it, how much is too much, is a big help in getting back some financial control. Here are a couple of suggestions.

• The Cost of Keeping Your Home Safe

  Home is where the heart is, and is something we would like to protect as much as we can. So what are the best ways to protect what is often our most treasured asset?

• Keeping Your Head Above Water When It Comes To Debt

  So much of what is written about personal finance is written by people who are getting- or have gotten- themselves out of debt. They’re the golden children of good finances, some even living debt-free lives. But how much relevance does that have to the rest of us, a lot of whom are struggling to make the minimum repayments let alone get debt free?