Financial “Diet”

When the new year started, I decided I wanted to try tracking my money again. I did a decent job for a few months last year, but my enthusiasm petered out at the end of April. Frankly, not too bad. What I did last year was attempt to track every single purchase I made and the method used. I maintained a paper log, because there are some things for which I prefer paper. Honestly? I think it was playing with the log book that enabled me to continue with the project as long as I did.

This year, I decided to try a similar, but yet very different method. I’m weaning myself away from using credit cards, and I’m actually doing a pretty good job of that. My credit cards do not reside in my wallet, so if I want to pay for something, I only have my debit card or whatever cash I have on hand. I do have a Target Red Card which I use whenever I’m there, but it’s the debit version. I like this way of conducting my personal business, and I do believe that it’s helped me to minimize the amount of debt in my life.

I decided to set up another ledger for this year, and picked up a cute notebook at Target which I could customize. Pretty notebooks make you want to use them, so go for the pretty on this type of project. I then set guidelines for the ledger:

  1. This is not be a running list the way last year’s ledger was.
  2. Sections are broken up by pay period (bi-weekly in my case), and only track the spending of that particular paycheck.
  3. The ledger only tracks charges to my checking account (yes, this is a glorified check register).
  4. Cash transactions are only noted as ATM withdrawls, rather than individually.
  5. At the end of the pay period, positive balances will be transferred either to my savings account or to one of my bank loans.

The stipulation of point number two can be a bit funky. Here’s an example using my paycheck which hits tomorrow:

Photograph of handwritten ledger page noting the pay period dates, bills which hit during that time frame, other major expenses in that time frame, and the ledger itself which is separated into columns noting: description, income, expense, if it has cleared, and balance.Now, the “PL” which has the other designation “whited out” is my personal loan. Amica is my car insurance. Between the three bills hitting this pay period listed (rent is the third for those who can’t see the image), that’s pretty much my entire paycheck. I also forgot to note in there my Discover card payment which completely kills my paycheck. However, because I knew this would be a bill heavy pay period, I specifically saved money from the pay period which ends today to cover the personal loan payment and the car insurance. What I’ll be doing is noting those charges in that section (the pay period previous to the one pictured) so I can then figure out the appropriate amount to transfer into my savings account.

By focusing on my money one paycheck at a time, I think this will allow me to be more cognizant of my spending habits as well as give me the opportunity to rebuild a bit of a savings account. I’m expecting to move to an apartment where the rent will be about 150% more than of what I’m currently paying in the next few months (I was never even close to being a math major <G>), so it will be even more vital that I have a tight reign on my cash flow.

What fun ideas have you come across for tracking your money?

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