Tracking Expenses in a Daily Spending Diary

Instructor: Yuanxin (Amy) Yang Alcocer

Amy has a master's degree in secondary education and has taught math at a public charter high school.

Keeping a spending diary has so many benefits. But you can only benefit from it if you keep accurate records. Learn how to record your transactions in this lesson so you can gain the most benefit from your spending diary.

A Spending Diary

A spending diary is a journal where you write down all your expenses for each day of the week. Keeping a spending diary is a great way to see how you are using your money. One of the many benefits that come from keeping a spending diary is that of spending less. You might be surprised to find just how much you spend on certain things. When you start to realize just how quickly your expenses add up, you are more careful about how you spend your money.

So, what kinds of expenses do you track in a spending diary? Everything! This includes your cash transactions like when you buy a piece of candy at your store around the corner. But, it also includes transactions such as paying rent, paying the utilities, paying for your cell phone. Any time money leaves your person, whether it be from your hand or from your bank account, you record it. Plan to keep your spending diary going for at least a month. After a month, you then add up your expenses. You can see how much you spend per category. With a spending diary, you can also see if you are spending more than you earn.

How to Track

Spending diaries can be as complicated or as simple as you want them to be. They can be as simple as having a column or row for each day of the week or even just writing everything down in a little notebook with headings for the day you make your purchases on. Or it can be as complicated as having various columns set up for each type of expense such as rent, clothing, eating out, etc. You can use paper and pen or pencil or you can go with a more technical solution such as creating a spreadsheet on your computer. There are also apps for smartphones you can download that will help you track your spending. Let's look at these different methods of tracking your daily spending.

Whichever method you choose, you will need to get into the habit of saving every single one of your receipts. Designate a 'special' place in your purse or wallet for that purpose. If you are not going to be able to document your purchases on a daily basis, it is also a good idea to have a 'special' envelope at home where you will transfer all of your receipts until you have a chance to enter them.

Using paper and pen or pencil is easy and quick but you will need to manually add your expenses at the end of the month. Using a computerized version in a spreadsheet or smartphone app lets the computer do all the math for you. As if that isn't good enough on its own, the computer or smartphone can also sort your categories for you, so you can quickly see how much you spent on coffee last month. You can also customize how your expenses are shown. But wait, I saved the best for last. Many of the smartphone apps for tracking daily expenses are free! Look at you, already saving money!

How to Record

The necessary details you need to record from each transaction are the exact amount, the day the transaction occurred, and what type of expense it was.

Say for example, you went out and purchased a chocolate bar this Wednesday and you spent $1.69 on it. To track this purchase, you can write down your transaction in a little notebook that you carry around with you like this:

spending diary

See how simple it can be? All you need is to note the day, the exact amount, and the type of expense. With a little notebook, when the next day comes, you just need to write another heading for that day.

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