A potentially new spending-tracker person

[Life_is_Simple]

My sister says she is feeling poor, and not making enough money. I suspect it is more that she spends money, without knowing where it is all going. I'm going to tell her to try tracking for a month, as YMOYL advises. I *think* she has the book.

Anyway, do you guys have any advice for a new person tracking their money? Anything to make it easier? Stuff about categories, etc? Any comments from others who have recently started tracking?

Thanks :)

[herbgeek]

Have a little notebook that you carry with you at all times to write down stuff as it happens. Don't worry about categories until you've collected data for the first month, then the categories will be more obvious to you anyways. I did this for 5 years, until the habits were so ingrained that tracking became unnecessary.

[SteveinMN]

I agree with herbgeek -- paper may be low-tech, but you can always have it with you, so it's more likely to be used at the time the expense is incurred. Make sure DS carries a little pen or pencil with it (to eliminate that obstacle). I personally prefer budgeting with software, but that's because it's how I think and because it's easy to categorize expenses and track them over time.

Oh, and she should not forget the bills that tend to creep out of sight: utilities, insurance (if not paid monthly), dues, subscriptions, etc.

[dado potato]

I use a spreadsheet of my own devising, and save it every month, so I have a rolling average of monthly expenditures at the foot of each column.

I separate food for home consumption from other things that may be bought at a supermarket, such as "Snacks & Soda", "Household Supplies", "Office Supplies", "Beer Wine Liquor", "Out of Pocket Medical" and "Hair".

Gifts for people outside the home is a separate category.

I try to update the spreadsheet daily. When the data has been transferred to the spreadsheet, I save each month's receipts in an envelope. I keep envelopes going back 1 year, in the event I want to fish out receipts for research or merchandise returns.

The main difficulty I have, keeping records for 2 people spending out of a common pot, is dear wife sometimes forgets to inform me of "small" cash purchases, eg, coffee at a convenience store, smokes, garage sale items, etc.

[ToomuchStuff]

Those old paper notebooks are great. For the computer part, I recommend Gnucash, but it is certainly not the only option (or always the easiest).

[Aqua Blue]

I use an envelope. I put any receipts I get on the inside, and keep a pen inside to jot down non receipt expendures. When I get home I jot them down and cross them off the envelope and use the envelope until it is full. I usually use envelopes that i get in junk mail.

I am a little obsesive about it and actually keep a sheet of notebook paper that lists line by line what I bought. I figure if it is important enough to buy , it is important enough to list. I don't buy much so it isn't a big deal. I have to admit that sometimes I don't buyimpulse things because I don't want to list it. I could however tell you what I bought on any given day 16 years ago. LOL.

Then I have a sheet for each month(printed on colored paper, so it is easily seen) On the front side is categories: like auto/gas, auto/Miantenance, basic food, junk/fast food, pet, sales tax, Each of these has two columns, one for current month and one for year to date. I also have at the top of the page the total expenses for that month and ytd, and average monthly expenses.

On the back of this sheet are boxes with categories that have multiple enteries: Auto/gas, basic food, sales tax to name a few. The categories that only have one entry(electricity) just go on the front.

This would be way to complicated for someone new to tracking, but it gives me the info I want to know. I have gotten several people doing something similar and they all have found it very helpful. Knowledge is power.

[Float On]

She should really make it a goal to go cash only for a month. Using the debit card or credit card it's too easy to say "I'll catch up later".
Sometimes it's hard for a person to go into tracking every dime, it gets overwelming 4 days into it. Maybe take an area or two that she tracks - personal spending money, groceries - for the first month.

[Rogar]

I use debit card for nearly all my purchases. When the statement comes at the end of the month I simply categorize the purchases and add them up. I write checks for my utilities and insurance, but few enough that they are easy to track from my checkbook. I carry a little cash around for small items, but in the big scheme of things is probably not significant, or could be easily tracked.

[catherine]

I agree with the notebook carried with you all the time.

Then you need to actually enter data somehow. Before the computer, I would just go through the daily notebook pages on a weekly basis and tally up food, gas, entertainment, clothes, etc.

Then when Excel become available, I started doing the tracking in my own spreadsheet. Now I use YNAB but to be honest, I still kind of like my own spreadsheet.

For a new person, I think it's really important to be diligent about just writing down EVERY expenditure accurately. Then, just add it up, keeping the categories pretty simple. If it gets too complicated, a person not used to this kind of discipline is going to get discouraged. So I'd keep it broad categories. If one category, like food, starts looking really out of whack, then I'd get more micro and look at groceries, vs. fast food vs. restaurants, etc. to try to analyze where expenditures should be cut.

[Life_is_Simple]

:+1:Thanks guys! I am relaying the tips onward.