Tuesday, March 27, 2007

Tracking Every Penny - Part I

During the month of March I've been running a little experiment at home with my wife. I'm trying to track every penny we have spent so far this month.

So far I've found the exercise useful to discover a number of things around myself. First I now know that it is hard to remember to keep every last receipt that you get everyday and the number of places you have to ask to get one. Also I didn't realize the amount of receipts that we get in a month. Case in point, I now have a stack of receipts that is about 1 inch thick.

The second thing I found out about myself is that I'm really not that good at learning a new habit. I've been trying to remember to enter the receipts into this little Excel template I downloaded and I have only managed to do it twice this month. It's not like it is hard to do, but I just find myself pushing it off. So if I were to do this again I would try to get in the habit of entering it in daily rather than weekly. It's easy to push something off during the weekend, but harder to do it when I sit down at this computer every week day to write this blog.

Overall I'm happy with this experiment so far. My goal of this is to try and determine if I really am spending close to my budget or is I'm overspending and not realizing it. My wife's goal is a bit different she wants to be able to answer the question "Where did I spend all my cash this month?"


J said...

I've attempted a similar experiment a few times in the past.

One method I found useful was to pay, as often as possible, using my Interac card. I would then download my bank statements (TD offers a number of different formats, including .csv, which you could import into Excel) into Quicken, categorize them, and it would give me all sorts of fancy reports detailing my spending habits.

It's quite an eye-opener.

Canadian Money said...

I make it a point to use MC as much as possible, this gives me a receipt and more airmiles. MC is paid off monthly to eliminate interest.

We get a good inch of receipts each month as well.

For me, the fewer times I have to sit down and enter numbers into the PC the better I like it.

I only input monthly totals, calculated for each category by hand. Sometimes I only do spreadsheet entry every two months or so.

We also round off every expense to the nearest dollar to save on the math.

Guy said...

I've started to use Microsoft Money again starting on Jan 1, to accomplish just that.

The key to success is to not let yourself get behind in data entry. i walways try to do it every single night, going over my, and my wife's expenses for the day.

Downloading statements automatically from from the web also helps on data entry.

Now that I will soon (Mar 31) have 3 months' worth of expenses, I hope to sit down and look at the various expense reports automatically generated. From there, I expect to set a budget for the remaining of the year.

Microsoft Money has a very good budget tool where it can analyze your past expenses or you can enter your own numbers per categories (It is up to you).

Once you start tracking every single dollar you spend, it is mind blowing and it really makes it easy to see where all the money goes!

Canadian Dream said...

Everyone thanks for your comments. I really like the ideas on how to make this easier overall.

I really like CM's idea of rounding to the nearest dollar to save on the math.

Guy - I tried MS Money a while back and I didn't like it. Too much setup in the front end for me.