Tracking Expenses

[kib]

This may wind up being more of a whine than a question, but I'm revisiting the idea of closely tracking expenses in 2015, because after 6 years of not tracking, my budget/expense base seems to be based on some extremely loose estimates and I feel like there may be some lifestyle creep to address.

One of the things I find really difficult to keep track of are the 'deals'. I buy a meal at Claim Jumper, I buy some paint at Home Depot, I buy a new laptop from Tiger Direct. I get $14.22 in my checking account at the end of the month because I get 1% off my monthly purchases, which includes those items, and then two months later or so, a deposit of $83.46 shows up as well, because my cc had a special 10% promotion for those stores I mentioned, and then a month after that, a check for $3 comes in from a paint rebate. Or, I buy a store gift certificate for Lowes at 15% off the face value and then gradually spend it down buying repair and gardening items. It's all well and good, but what do I/you do about that "extra" money? Do you make an effort to be exact about every purchase cost in your tracking? Do you consider the purchase price to be the price you paid at checkout, or what the item actually cost you after all the doo-dahs? Do you consider rebates to be income? Does anyone have an easy way to look at this??

[rodeosweetheart]

I don't know if this is the correct way, but what I do is write down what I actually spend. Then, when the rebates come in, I put them into savings acct and don't consider them as much of anything. Just sort of windfall-ish.

[Aqua Blue]

I have kept very detailed records for about 25 years. I can go back and tell you what and how much it cost for purchases on say July 15, 1996. I do it all by paper. I have a piece of lined paper that I write line by line what I bought. It might read for example todays date and haircut$$, 8oz parmesan cheese $$, dog treats $$, 100 c LED Christmas lights $$ I also have a column for Bountiful baskets to list what I received from them as a good portion of my vegs and fruits come from there.

Then I have a colored piece of paper which I print the original from a file on my computer. I changed it as my needs changed for quite a few years, but now it has been the same for many years, although two years ago when I gave up shoveling snow and mowing I added a line for those. On the front of this paper are totals. At the top are total spending for the month and total spending year to date. Down one side is categories like Auto, Food, Dog, Sales tax, Health Care etc. Under each of these categories are specifics, like under the auto are lic/insurance, fuel, gallons of fuel, maintenance, misc(car washes ie). On the other side of the sheet are lines marked 1-31, with columns after for amount and running total. It tracks how much I spent on a specific day and a running total for the month ,


The back side of this paper has boxes to enter the categories specifics. I do have another blank lined paper for each month with columns for food in, dining, and fast/unnecessary food which I use only for totals and throw away at the end of the month. Those categories had too many entries to keep on the back of the other sheet. So the Auto fuel might have two entries for the month which I total and put on the front at the end of the month. It also has a column for free stuff. In addition to what I state below I use this for anything I get for free, for instance a friend gave me a pair of capris this summer that didn't fit her, they went in the column. It helps me remember to be grateful.

If I buy something from say Menards, which often has free with rebate it goes into the Free column and I don't count it in my totals even tho I start out paying for it. When I get the check to spend I spend it just like cash and account for it as cash. I so get some money from credit card rewards, not a lot as I don't actually spend very much a month. When I get that I treat it as free money. I write what I bought with it in the free column. I usually use that money for splurges I wouldn't normally buy. Last time I had one I bought a BBC TV series that I love and could watch many times.

It seem complicated, but actually it only takes me a couple of minutes to do. I think the little bit of work gives me an important overview of what I have to work with.

[catherine]

I don't do rebates that often, but when I do, I account for the purchase in my YNAB--the amount I paid that day. When I get the rebate, I list it as income. The reason for that is, I'm sometimes forgetful when it comes to mailing in rebates (which is why I don't do them). Plus, it takes so long to get them that I want my outgo for the month to be accurate. As far as buying gift cards at 15% off, I've never done that, either. I guess "simple accounting" to me is just making sure the actual income and outgo is accurate.

I use both Mint.com and YNAB. YNAB is great for inputting income and outgo data. My main categories are Needs, Wants, Giving, Debt, Taxes. I use Mint "transactions" to make sure I didn't forget anything, and it's a more accurate look at my actual cash, credit and debit/loans.

Aqua Blue, I thought I was detailed--but you take the cake! I never thought of a "free" column!

[Birdie]

I log all income and spending on and old copy of MS Money. All rebates or income from my credit card purchases are logged as miscellaneous income. I don't keep track of what I could have spent before a discount, but what I actually spend. You could keep a separate tally of 'found money' from discounted spending if you like. I find I would not make a purchase at the full price, but only at the discounted price, so I don't bother to log any discounts.

[kib]

Thanks so far!

Aqua Blue, that is truly amazing. I know myself too well, I think I could keep that up for a few weeks and then I'd wind up starting over. and over. and over.

I guess I need to ask myself what it is I'm hoping to learn from this tracking. I want to use it as motivation to spend less, and I also want an accurate record of my cost of living as a template for future spending. It's just hard to come up with reasonable budget totals that way - I don't pay full price and I probably never will, but I also don't want to count on deals and rebates too much in preparing the next year's budget. I suppose it's safer to use full price for the budget 'envelopes' and then bank the rebates.

Birdie, yes, I have no problem with using what I pay at checkout as the 'real price', calculating real time discounts at stores would just be too hard. It's only the trickling price reductions like rebates and cc refunds that are tripping me up.

[SteveinMN]

I pretty much do what catherine does. Early on in simple living/retirement, it was more important to track every dollar since I wasn't sure we'd have enough of them. Now that years have passed and I'm comfortable with our income and outgo, I still track expenses, but I allow for more "black holes" than I used to.

Rebates and small purchase returns are part of that haziness, since, as catherine noted, the credits can take so long to arrive that it messes up monthly accounting. Applying rebates and such to purchase prices also makes it hard to reconcile the expense recorded with the debit/credit card statement. And we're not talking large sums of money here. So I figure the margin of error is small enough to ignore.

Dirty secret: I also do not balance our checking accounts. Well, I reconcile by making sure income and outgo we've recorded are there and extraneous charges are understood. But I don't balance down to zero each month. Not my idea of a good time. :)

[Aqua Blue]

Thanks, it is necessary for me to keep my expenses low; this year I should be right around 20k if all goes well this month. That is for everything I decided to quit working several years ago because of unrelenting back pain, I just couldn't stand to be on my feet all day everyday. I tried working part time and that didn't help . That meant I had to decrease my expenses. It has been worth it for me.

My way of thinking about it is say there is good thick cut bacon for $4/lb after rebate. I would pay that for it, but I wouldn't pay the advertised before rebate price of $8/lb. It also prevents me from "counting the rebate twice", which a sil does often. She says I got this clothes for $x with the reward money I got from last time and then I will get an extra $x this time for going over $50(Kohls), so I really only paid $30 for this(when she really paid $40 for it.)

I don't do a lot of rebates. Pretty much only Menards for mail in rebate. I have never had a problem with them. I keep records of that too. I occasionally us like Kohls, but most of those goods come from thrift stores for me.

I never could get into budgets. I like looking at data from previous years but how does one predict that this is the year xx is going to happen. My goal is to live as low as I can and still have a comfortable interesting life.

[lessisbest]

In my world I first come up with a budget (monthly, quarterly, bi-annual and annual expenses), then I track income, giving, savings, investing, and spending - the "how" you track it is whatever works best for you. As you can see from everyone who has posted, they all are somewhat different. After nearly 44-years of marriage, I have used the same process all these years as I did when our budget fit on half of a 3x5 index card tucked into an envelope along with our cash for expenses.

If you need to figure an amount for your utility bill budget, figure the largest bill from the previous year and budget that amount + $10. Budget this amount every month. There should be enough surplus in this budget amount to pay for the high months with peak use. Our average annual cost for electricity and gas combined (since 2009) is close to $2,000 a year (plus or minus $100 each year), so I budget $2,200 for utilities. We have a zero budget. At the end of the month we have nothing left. Every dollar has a name whether it's savings, groceries, retirement, giving, holiday, "walking around money", etc. You figure your expenses on paper first. If you don't have the income necessary to cover the expenses, you begin to reduce your expenses. You also need to save monthly (or put aside a monthly amount) for bills you have due throughout the year -- property taxes, vehicle tags/taxes, insurance, etc. I've done this enough I have a set-aside amount each month into a savings account to cover things like property taxes, heating/cooling contract, car insurance, safe deposit box......

I have a food budget of $125/month for two adults - cash only. In my food budget classes we start by figuring $25 per person per week and adjust it from there according to people's personal needs. It's an area where it's easy to overspend.

[awakenedsoul]

I don't really have any rebates. My goal is to stay at or under $20,000. a year. This year looks good. I'm spending some money on acupuncture this month, but it's worth it. I record everything I spend in my checkbook register. I write in the cash amounts, too. It keeps me accountable. I spend more than most people on food, but it's worth it to me. I like buying organic produce and grass fed meat and soup bones.

I just try to stay as low as I can all year. At the end of the year, if there's a surplus, I apply it to something like additional home repairs, tree trimming, or this year, acupuncture.

[Dhiana]

Like RodeoSweetheart I consider all of that "windfall" funds and it immediately goes into retirement funds if it qualifies or savings, not to be touched.

[jp1]

I don't normally do rebates so this isn't an issue for me. If I did, though, I'd just count them as rebate income. I'm not that anal in my tracking. I just want to catch big changes over time.

One idea, though, can you track it as income for a certain budget category? For instance, the paint rebate could be "household maintainence income" (or whatever category the paint expenditure was in originally) I use mint, so I'd probably deposit the check and then when the transaction showed up in mint as a credit to my checking account I'd put the category as household maintainence so that when I looked at my household maintenance spending it would be reduced by the rebate amount.

[ToomuchStuff]

I don't remember the last time I did a rebate (been a long time). I generally consider them to be a tax or loan, on something that means your overpaying and if you lucky (and your rebate stuff doesn't get lost) they will send you some of YOUR money back.
Unless there is a specific reason (years ago, a certain router, due to aftermarket firewall software which was on sale with an instant rebate), it makes me look at other brands and such.
However, I do a lot of buying for work. This can be local (something small, rather not waste a company check), or something online (personal credit card, neither owner is computer literate). This just gets recorded as a normal expense (have a work category), and the reimbursement gets recorded as reimbursement under other income. *I can print reports using what is entered to break it down further*
Currently I have just shy of $66, worth of receipts to turn in.

[Blackdog Lin]

I don't do rewards/rebates, so have nothing to add to the discussion at all, but.....


Dirty secret: I also do not balance our checking accounts. Well, I reconcile by making sure income and outgo we've recorded are there and extraneous charges are understood. But I don't balance down to zero each month. Not my idea of a good time.

Steve Steve Steve. I will not judge :), but I will whisper: Quicken, Steve.....Quicken. Adds maybe 10 minutes/month to the household financial work, but makes balancing the checkbook (to the penny, I might add!) not only superfast but almost fun, it's so easy. (I used to be like you.)

I know there are other programs (I used MS Money back when for a while), but Quicken.....oh, Steve, you NEED to balance your checkbook.

:)

[SteveinMN]

Quicken. Adds maybe 10 minutes/month to the household financial work, but makes balancing the checkbook (to the penny, I might add!) not only superfast but almost fun, it's so easy. (I used to be like you.)

I know there are other programs (I used MS Money back when for a while), but Quicken.....oh, Steve, you NEED to balance your checkbook.
I do use a Mac-only application for tracking expenses that I could use to balance to the penny. But for years I was lucky enough not to have to worry about whether I was spending more than I made. And even now tracking down to the penny holds little appeal for me.

I just look at our accounts on-line, see if I'm in the ballpark with what I've recorded in SEE Finance (app of choice) and call it good. If there's a big discrepancy, I dig further. There are so many other little spending holes (like CC rewards and checking-account interest and the money DW spends when she visits her mother every Sunday) that tracking that closely seems a bit futile anyway.

[Tammy]

Balancing my checkbook is irrelevant since I've gone to online bill pay. I don't keep a separate check register on paper, I see my account in real time, all the time. It's always balanced.

[ToomuchStuff]

The point of balancing is to make sure you and the bank/credit union, agree. I just did mine in well under two minutes, probably under a minute except I smashed a finger this morning so typing is taking longer.
I have found errors before, some the banks, some mine and some who I paid. I've had checks deposited for less then I wrote, bank transfered money from the wrong account to the wrong account (that would have caused me a fee), and math errors on my part (normally late night recording, have almost always been in my favor).
But even though I know I can online bank, until I have a machine dedicated to such, I know how easy it is to have a computer compromised and I don't need the hassle. (my email that I set up with them, was once hacked)

[SteveinMN]

The point of balancing is to make sure you and the bank/credit union, agree. I just did mine in well under two minutes, probably under a minute except I smashed a finger this morning so typing is taking longer.
I have found errors before, some the banks, some mine and some who I paid. I've had checks deposited for less then I wrote, bank transfered money from the wrong account to the wrong account (that would have caused me a fee), and math errors on my part (normally late night recording, have almost always been in my favor).
And that's just what I do. I'm essentially checking income/expenses posted in two separate locations. One is checked against the other and the big stuff identifies itself. I don't want to spend tons of time trying to figure out a small dyslexic-math error just so I can come to zero. Or spend 30 seconds entering the 84 cents interest we earned on the account this month. The deposit is to the good and ignoring it does not hurt me.

It's all a matter of comfort level and I have found mine. I won't knock someone else for taking the time to balance to the penny. It's just not in *my* experience worth the time for very small discrepancies.