Tracking the ins and outs of your money doesn’t need to be quite as boring or scary as it first sounds. While online bank accounts and apps make it super easy to find out how much we have at any given moment that’s only a glimpse of what you’re actually doing with your money. Sure, such a check may make it easier to avoid over drawing, but you’re dealing with just that moment in time. Money is rarely truly at rest

Why it’s important

The. ebb and flow of your money is dynamic. When you pay your monthly rent  you’re actually reducing your total amount in  your bank account in exchange for a month’s living space. Your money actually moves from your account to your landlord reducing your total. Which is pretty obvious.

But those 3 stops last week at the local coffee shop may not seem like much. Consider, though, they could run you $15 or so a week if you establish a 3-coffee treat habit. If you add a tip and a cookie you’re looking at $17 or so each week. Which does mount up.

Please, the goal here isn’t to get you to stop buying coffee and tipping the server, that is unless you’re not making enough to be able to afford $15 or $20 per week on coffee.

The goal is to help you become aware of your spending. All of it, and all of our income as well.

Another potential problem area is impulse spending. You know what I mean, you’re online and suddenly you are offered a lovely bauble of some sort. Without much thinking you immediately order it even though it costs close to $100.00.

Again the point isn’t that you should never treat yourself, it’s that if you’re unconscious or poorly conscious of the flow of your money, you may very well spend yourself into a hole.

As I gradually learned to track my money I benefited in these ways:

• I lost my fear of keeping track. 
• I saved who knows how much money over time on ‘courtesy overdraft fees.)
• When I decided I needed to buy a $50 gift for my daughter, I actually knew if I could afford it or not.
• After I got started, it rarely took me more than 10 minutes a day.
• I also found I could reconcile my accounts once a week in half an hour or less.
• I was able to save more than $20. More about this another time.

Biggest happy surprise

The biggest surprise, however, was knowing how much I had (or didn’t) in checking and savings helped me more at ease when negotiating my fees with a new client. I think what happens is if I know where I am with money I just feel like I have it together more than when I don’t know. That makes life easier, including when negotiating a new client.

How to get started tracking your money

While there is a fair amount of homework, it doesn’t have to be done all at once. Start by listing your income and expenses. I started by making an excel spreadsheet and simply recorded each item down the right hand side. In the beginning I only used two columns.  Since I knew adding and subtracting is not one of my strengths I wanted the computer to do that for me.

I soon knew I needed receipts. In some ways paper receipts are easiest, once I got in the habit of putting them in a particular part of my wallet. Teaching yourself to make sure you always put the email or text receipts in their own folders will help.

I followed the advice to enter my numbers the day they came in. In the beginning it was awkward and I made all kinds of mistakes. Slowly I got pretty good at it. I’d whip out the receipts, usually no more than two or three and open the appropriate folder on my computer.

Soon someone suggested I could add a third column and call it ‘actual.’  This left the first two columns as ‘planned income’ and ‘expense.’ This is especially helpful for those of us who have a variable income. And once you get to planning it lets you know if you’re on track or need to make some adjustments.

Soon my spreadsheet began to sprawl and I began to search for no or low cost software. Currently I’m using Mint which is pretty good. I’m also searching for a more powerful option. When I find it I’ll post a review. Meanwhile here is a list of free accounting software by Get App. If you find something you love, let me know.

Reporting to a friend is truly helpful

I was lucky that I had a friend who already knew me and many of my foibles. We used to call each other to book end and offer non-judgmental support.

Many of the suggestions here come from two 12 Step organizations that help people deal with money problems. They are Debtors Anonymous and Business Debtors Anonymous. They have both face-face.  phone and video conference meetings. Anonymity is honored. In addition there is literature.  Even if you’re not sure you need help, take a look at their websites looking for what you might relate to.

Create well and often,

Image by Chris Pastrick from Pixabay