Apr 17th, 2008
Frugality in Practice: the Spending Log
I started it years ago, and I still keep it going even though I’m not sure it really helps me all that much anymore. I consider it an essential part of what needs to be done to try to get your finances under control: it’s a spending log.
My spending log tends to simply be a composition book where I write down what I spend, where I spent it, and how I paid for it. Initially, it was a tool to get my spending under control; I had to be able to write down what I spent. While it seems insignificant, the truth is that if I spent on something that I really needed to not spend on, I’d have a few tinges of guilt when doing so.
The log let me know how much to expect to spend on something and helped me track prices at various stores for the same or similar products. It was through the log that I figured out that Foodland and Costco charged the same price for Diet Pepsi, but Costco’s string cheese was tremendously cheaper per piece than Foodland’s. The log also let me comparison shop over time; it helped me figure out that two gas stations I frequented tended to be cheaper than all the others, and that the soy milk I liked was most likely to go on special at Safeway and DaieiDon Quijote.
Finally, using a spending log helped me to really look at how much I was spending every day and get some control over it. I’d play games with myself, like see how many days I could go without spending anything, or trying to find a better price than the lowest I’ve found ever before. I still do that!
One of the first things I tell people when they ask for help getting their finances under control is to create a spending log to figure out how much they’re spending in certain areas and where they might be able to cut back.
Do you keep a spending log? Think about it!
This is a great first step for anyone to get their finances under control. And pretty painless. Just the act of writing down “$4 for a latte” can knock some sense into people.
Joe
Joetaxpayer:
Yes, I agree. It’s unquestionably an important first step! I’m kind of wondering, though, at this point if it’s still a step that is worth my continuing to take… not that it takes a lot of effort. It’s a serious habit now!
Right now, I really don’t have the time to start a spending log. But I think it would be very useful and we’ll probably throw one together in the future as we focus on our grocery expenses.
Your food examples really illustrate the power of a spending log. Unfortunately, it also reveals just how much time it can take if you’re buying food for an entire family.
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I couldn’t agree more! Keeping a spending log was the inspiration for my blog; it’s really keeping me on track.
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[...] in June 14th, 2008 by admin in Budgeting, Debt, Frugality, Goals Once you’ve established your spending log and used it for awhile, you can take a look at your overall budget. Your baseline budget is the one [...]
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