A New Year’s Resolution you can keep

11

Tracking your expenses. I’ve been doing it since January of 2008 and it has been tremendously valuable.

I actually got this idea from Ramit.  It really surprised me that I’d never considered categorizing and tracking where all my money was going.  After doing this for a year, I now know the average amount I spend per day, what I need to make each month, what I’m spending too much on, etc.  And since the economy sucks and we all have to buckle down, this is actually a great habit to develop.

Here’s how to do it: Download this spreadsheet I created and either save it to your computer or upload it to Google Docs.*  And yes, I know it looks messed up on Scribd — if you download it as an Excel file, it will look normal. (UPDATE: I didn’t know that Scribd forced you to create an account in order to download stuff — that’s idiotic.  You can also download the spreadsheet here without having to sign up for anything… but you’ll have to wait like 45 seconds.  Why are these uploading services so evil?)

From now on, save all of your receipts in your wallet/purse.  At the end of the week, take out all of the receipts you’ve collected and enter them into their respective categories on the spreadsheet.  Also, add a comment onto any larger-than-normal expense (e.g. $1,000 –> right-click ‘Insert comment’ –> “Las Vegas trip”).  That way, when you’re looking at that big expense a few months later in confusion, you’ll know what it was.

The financial data you’ll acquire in 2009 will help you see where all your money is going, and which of your spending habits need to change.  This spreadsheet will take up about ten minutes of your time each week, at most.  Actually creating the spreadsheet is the time-consuming part, and I already did that for you.

Happy new year, everybody!

*I think it’s a bit easier to use Google Docs rather than saving it to your hard drive because you can make changes to the spreadsheet from any computer that way.  But for some reason, Google Docs won’t upload the charts and graphs I put on the ‘Graphs’ page, so feel free to email me if you need help setting those up.

By Charlie Hoehn

4 comments on “A New Year’s Resolution you can keep

  1. Mint.com does a fairly good job at tracking expenses across all of your payment streams — credit cards, debit cards, ACH. The site is completely safe–it uses the same technology as every major financial institution.

    If you’re really hardcore, like me, try Yodlee.com for calculating your cash flow.

  2. I’ve tried Mint. Loved the interface but wasn’t impressed overall. I like having more control than they gave me. Also, I couldn’t get Mint to add my ING Direct account. A lot of people have had that problem with Mint/ING, apparently.

  3. Good for you! When you track your expenses it is for sure eye opening. I use quicken and I love it however it doesn’t save you from doing the one important step that you pointed out – saving your receipts to actually track the info. But if you do this quicken does a great job. Good luck with 2009 I know that saving more money in the New year is top priority for me!

  4. I tracked my expenses for 2008 and it was really exciting to to see the results. I can see how much money I spent on entertainment further broken down by clothes, travel, eating out, movies, and feel motivated to trim a little.

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