One way that people keep track of what they are spending is to wait until the end of the week or usually the end of the month, take all their receipts and bill statements, add them up and get a total. This works for some but does not work for others. Small amounts that are in cash may end up being guess-timated, and some receipts get misplaced, and again there is guessing as to the amount.
A method that might be useful because it truly "visualizes" spending is to use a calendar on a daily basis. Microsoft Publisher gives you a calendar function and downloading the plainest version, adjusting the size margin to margin, gives you plenty of writing space.
Some people may find it useful to have a weekly calendar and some a full monthly calendar--whatever works best for you. If you are using the weekly calendar (perhaps to allow more room for writing) then download a full month at a time and staple them together.
First, do you have any bills that are the exact same amount each month and that are automatically paid? Enter them in the appropriate space in the calendar. Do you have any simchas that will require a gift? Enter them on the calendar with either the amount of the gift that will/was given or the amount spent on buying a gift. Do you have appointments scheduled for the month, such as a dentist appointment or haircut appointment? Enter the event on the calendar and then fill in what you either know you will be paying--such as a co-pay for the doctor--or enter the amount on the day you use the service. If it's something like a haircut, don't forget to include the tip.
Each night enter in what you spent that day. Don't forget to include that cup of coffee you got in the morning or that magazine you bought. Certainly don't forget any out-of-home eating expenditures. And don't forget any other cash expenditures, such as giving a meshulach a few dollars, or giving the kids a few dollars to put in the pushka during school davening, or that few dollar collection at work for someone who just had a baby and there is a group present being purchased. Also include any savings you did, whether by deposit or by direct deposit or payroll deduction--this, too, is an expenditure.
If you are married then both of you should have a calendar. It's amazing how even the non-bill paying member of a couple can spend money during the month. At the end of the month you simply tally up all the expenses and can see the total spent that month. If your spending is within your budgeted limits then fine. If you are pushing the budget or exceeding it, the individual expenditures are there in one place so that you can see where you might have overspent and where you can cut down for next month. It's also simple with this method to note the categories that you are spending on.
It would also be helpful to find a spot on the calendar for noting your income as you get it. If you are getting a paycheck from your company, note any savings and then note the net amount left for your use. If you are getting cash then note when and how much.
This method will work for some and not for others; what's the worse that can happen if you try it? It might not work for you? And just maybe it might work for you.
6 comments:
This seems like a lot of work when there are programs out there that will track expenses and give you a built in calendar function as well. I use Quicken and it has the ability to add recurring bills, paychecks, and the like. You can also schedule one-time events like you're describing. You can then view the month or week as calendar. It also allows you to categorize expenses and will automatically make tallies. You can even enter a budget and it will track how you're doing. Plus, you can download transactions from your credit card, debit card, and bank. I'm sure other programs offer the same.
In terms of cash, here's a far simpler method that doesn't involve the hassle of holding on to every receipt, entering 100 different transactions, and remembering what you did every day, entering every day, or wondering where that $5.27 went. I just consider cash spent when I take it out of the bank. I don't bother categorizing it beyond "cash." I know how much cash I'm taking out every month and if that amount becomes too high I can think back to what I spent it on. But, tracking every cash expense is just too work-intensive. I would add that it also can cause a strain between spouses when one is OCD about saving every little receipt and remembering every little expense and the other is more lackadaisical. Just tracking cash taken out can be a huge relief.
Personally, I try to use my credit card as much as possible since I'm not an over-spender and this way I have my expenses automatically tracked for me. I try to avoid using cash whenever possible.
I also use Quicken JS but I'm the one that takes care of the monthly billing and keeping track of the accounts. My wife is the one who does most of the other spending for the house. Show her a spreadsheet or anything resembling it and she backs out of the room. She just might be willing to put some data on a calendar so that end of the month I can at least check her expenditures against the card summaries.
Mike,
If she's using a credit card, you already have every transaction. It's no work for you - you just download it into Quicken. For cash, my method is to just view cash as "spent" when it is taken out of the bank. I don't track anything beyond that. Such a system makes it easy for the bill-payer/expense-tracker, and easy for the one doing most of the purchases.
Maybe it's more "crude" or "rough" than tracking every single minute expense, but there's a cost-benefit analysis that has to be done - how much extra data are you really getting by tracking all cash expenses individually instead of as an aggregate? I found it was more hassle than it was worth since most cash expenses were for the same types of items and it was a definite strain for my wife and I to try to keep track and remember every little purchase.
JS, even though the credit card companies give you a monthly transaction list, it pays to have a record of your own of those transactions. Someone 'borrowed' one of our credit card numbers after I had used it in one of the major drugstores. They didn't go crazy with the spending so that we didn't see a huge amount suddenly appearing that would have jumped out at us. Instead they charged $15 here and $20 there, numbers that wouldn't raise a red flag for us because they were well in line with what a purchase might be in that drugstore.
We caught them only when I sprained my ankle and was at home for two weeks. My husband never went to that drugstore and I couldn't go, so the charges were obviously bogus ones. Luckily I had all my receipts and we got the card company to do some investigating. A comparison of signatures showed that I obviously wasn't the one making the charges.
It's more common that you think for those credit card companies to make mistakes and you need a way to double check them.
Trudy,
Fair enough. I know which stores we shop at and which online vendors we use. Purchases from other places get looked into. Most of our purchases on made on Sundays, so purchases during the week may be subject to scrutiny. Regardless, people should use whatever method they find most convenient. For me, it's far easier to do what I described above than keep tons of receipts and write down all my purchases in the off chance that someone uses my credit card and I don't immediately spot it. I think in the last 5 or so years only once did I have an issue with a credit card where a parking lot attendant swiped my card and then claimed it didn't go through and swiped it again.
I must be out of the norm, but since hubby and I bring lunch to work, don't buy coffee or beverages or snacks out, charge our gas (yes the charge card is paid in full each month) pay for groceries with a debit card and make almost all charitable contributions by check to have a record for taxes, we almost never use cash. $100.00 in cash can last a few months. Having a record of expenditures on the bank and credit card statements makes keeping track of finances simple and quick.
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