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In this post, I wrote about why it is important to track your spending.  Well, this post wasn’t just talk, I’ve been walking-the-walk and tracking my spending for almost half a year now.  I’ve learned a lot, we’ve refined our process for how we track our spending, and I am even more convinced that it is important to do this and that it is helpful to engage in this process.  In fact, I would go so far as to say that tracking your spending carefully is almost more important than having a budget (in fact, we don’t have a budget we only track.)  

In July, I began tracking every cent we spend (you can see the data here).  I’m not good at keeping receipts (I put them in my wallet and they all get crumbled). I am also not good at taking the time to write down every single thing I buy (half the time when I am out of the house I am in a rush to get back so taking an extra few minutes to write down the details of my purchase would only make me later).  So, we decided the easiest way for us to do this was to put almost every single thing we buy, down to a .49 pack of gum, on a credit card.  

This has worked out really well for us for a few reasons.  The big reason is that we’ve been really maximizing our credit card rewards program (dismal as the 1% cash back may be, we’ve been able to cash out a few $100 awards).  The other reason is that it has made it easy and fast to track spending.  At the end of the day, when I’m already at my computer checking email, I can just look at our online credit card info and copy the columns for the days spending to update our monthly spending spreadsheet. 

Although some say credit card usage increases your spending, I think using a credit card and knowing that the whole purpose in doing so is to track spending reduces this phenomenon.  When I have a $20 bill in my wallet, I know that I can spend it and DF won’t immediately see that I bought a $4 latte, and I won’t technically have to update the spending spreadsheet because there won’t be any real record of it.  But, once it is on that Mastercard statement it is there for us both to see, and its going to end up on our chart.  

The very act of tracking our spending has caused me to be much much more careful about what we are buying.  It has also helped me to see where we could do better- like cutting out all bank fees and interest charges and working to reduce our grocery bill even further.  Tracking our spending has helped me to set clear goals, and have an idea of whether they are attainable or not.  

I’ve also learned that we’re doing pretty good. 63.33% of all of the money we have spent since July has gone towards repaying debt.  And we’ve only spent $480.00 after rebate & a garage sale proceeds (where we sold grocery excess from CVS) on groceries since July.  We used to spend almost that much in a month.  

It is a bit frustrating that I have almost no financial data going back further than July, so I don’t really have concrete numbers to make comparisons with.  I suppose I could get my old credit card and bank statements and try to piece everything together and figure out exactly what my previous annual spending was.  However, I guess only the last 3 years would matter since before DF and I got together obviously my spending patterns were totally different.  And, we were living in a different city up until July so that would play a part too.  Still, it would be nice to know how much better we are doing now than we were a year ago.

This desire for further information is another thing that motivates me to track my spending- next year and ten years from now I will know exactly how we are doing compared to now.  That will be a nice feeling- to be able to account for my progress and financial changes over the years.