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 everything 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.
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.
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.
The most important part of a financial journal is keeping it consistent. 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.
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!