What happens when you track every single purchase for an entire month?
Well, a few things – especially if you’re new to this level of detail, which I so am. Tracking your spending is one of those things that everyone kind of knows they should be doing, but as with a huge amount of personal finance issues, the problem isn’t education, it’s behaviour.
That was certainly the case for me.
I knew I was supposed to track my spending, but the closest I ever came to actually doing it was a cursory glance at my Mint account every few months. It was only once I got really serious about taking control of my finances, from finally switching to a no-fee bank account to investing in the stock market, that I realized my version of “tracking” was woefully inadequate.
I was pretending to be good at managing my money, without having any idea where it was actually going every month. I wasn’t carrying any debt, and I was saving regularly, but that’s about all I knew.
That’s why I took on the challenge of tracking my spending down to the penny this month. At the beginning of the month, I opened up a Google Sheet and set myself up for a month of really focused tracking. Like a true personal finance nerd, I was so excited to get started.
Now that I’ve made it through 30 days of detailed tracking, I can say somewhat definitively that if you take on a challenge like this, you’ll experience at least one of these things.
You’ll learn things. Like, how easy it is to bury your head in the sand.
There were a few days, surprisingly early on in the month, that I didn’t open the spreadsheet. Not even one time. Unfortunately, it wasn’t because I didn’t have receipts to enter. No, it was more along the lines of “Wow I’ve already spent a lot of money this month and I so don’t want to face the music of seeing what the total is in black and white.”
Even after realizing I was avoiding my own challenge, it took me a few more days to sit down and face the music. I’m glad I did, especially because when I actually faced what I thought was this insurmountable failure, I saw that it wasn’t nearly as bad as I thought. Even though a few out-of-the-ordinary expenses came up this month, when I really looked at my budget, they were manageable.
Still, I will never again underestimate the urge to bury your head in the sand. That ish is real, even in pretty ideal financial circumstances.
You’ll quickly take accountability for going “over budget.”
In the last few days of the month, I was back on track with my daily spreadsheet check-ins, so I knew – down to the penny, as intended – how much money I had to last me until the end of the month. I had a general idea of what expenses I had coming up that were non-negotiable, like eating and car insurance, so my discretionary budget was really clear. When invites to events came up, or potential purchases were in question, I could easily see what the impact would be on the rest of my month and my ability to eat.
I make it sound sooooo dramatic, but really, it just gave me the leeway to prioritize a good friend’s birthday get-together, and know that I had room in my budget to go out for a pumpkin beer.
Tis the season, after all.
You’ll notice some wins!
Groceries
Before this month, I had been pretty set in my grocery ways. Between the Boyfriend and I, we spent within a few dollars of $600, reliably, every month.
After the entirely self-powered drumroll preceding the grocery budget update this month, I announced to The Boyfriend and The Dog that we had spent – wait for it – only $469.20 on food for the month! While the reaction was underwhelming from the rest of the team, I was beyond thrilled. That $600 mark has been tough for us to move away from, but it seems like we’ve gotten into a good groove, and neither of us has felt deprived of anything in the meantime.
Our new goal is to keep the grocery tally under $500 going forward, based on the success of this month.
Gas
As if Little Car didn’t have enough going for her, my grand total spent on gas this month was one fill-up at a cool $35.09. My current tank of gas will last me well into next week too, so it’s not like I’m running on fumes to make sure my September budget stays on track.
It looks like my previous gas-budget estimates were more based on the heavier travel months in the summer, and less on my regular fall driving. This is great news that I might never have noticed otherwise.
Want to start tracking your spending?
Download the spreadsheet I use to this day, and I’ll send you everything you need to make it through a month of tracking!
You’ll also notice some not-quite-wins.
Dog insurance
I have to admit something. I super-reneged on an earlier post this month.
I thought I was sooooo cool, calm and collected about the whole buying-dog-insurance thing. Namely, I was convinced that I had the nerves of steel to do without dog insurance, and save up for a dog emergency instead. And don’t get me wrong, I’m still saving for a pet emergency.
However.
As I look at my other savings goals, I worry about the dog insurance thing. Because as cool and strong as I like to think I am about it, if The Dog broke his leg and needed surgery, and I didn’t have the money in his dedicated emergency fund yet, I would not hesitate to pull the money from one of my other accounts, like my house down payment fund.
So I did some research, and found a new insurance plan that better suited what I wanted the insurance for in the first place. It has a higher deductible, covers 80% of major illnesses or accidents, and leaves me responsible for regular vet visits and 20% of the major costs. The way I see it, this isn’t so much insurance on The Dog as it is insurance against my emotions getting in the way of my other savings goals. For the $314.75 annual premium, which I paid this month, I’ve got a year of peace of mind and 12 months to build up an even better emergency fund that might ease my mind next year when it comes time to renew.
That said, it wasn’t just a major flip-flop. It also put an unexpected few hundred dollars onto my spending budget, and I withdrew $100 from The Dog’s emergency fund to help cover the cost. It was a hit to my savings rate – but way less of one than a major procedure on The Dog would have been.
You’ll see exactly how much you spent – and saved – this month.
As the title of the blog clearly implies, my goal is to save half of my income, and there’s no dodging that goal when you track your spending this closely. You have to face the cold, hard numbers and see how you did. This month, here’s how I did.
- Spending: 62.8%
- Saving: 36.8%
On one hand, I didn’t hit the 50% number, which for a few days I saw as a totally stressful failure. But then I came to my senses, and focused on the fact that I saved 36.8% of my income this month, which is nothing to sneeze at! Unless you, like me, keep forgetting this is allergy season and you really need to take those allergy meds every day. Then maybe there are some sneezes.
I also learned a lot from not hitting the 50% goal, and didn’t compromise on some other things that were important to me this month just to hit a number – including birthday events and gifts for The Boyfriend, who turned 30! I made sure to give my savings goals the appropriate weight, and I realized that the 50% number can’t be the goal in and of itself. It’s there to support my life, not take it over.
You’ll want to take on another challenge.
I think it’s clear, at least to me, that I learned a lot by taking on this level of detailed tracking for a month. I’m going to keep this level of detail going for October, but I wanted to take on something new as well.
That’s why I’m going to spend October working through Cait Flander’s Mindful Budgeting program. I think it’ll be the structure I need to really get insight into how I’m balancing my different goals, and I want to double check that I’m prioritizing the right things – not just for my finances, but for life in general. I can’t wait to dive in, and I’ll do a full write-up of how it went and what I learned at the end of October.
Also, as if it is already October.
Until then, I want to hear your tracking stories! Have you ever done the down-to-the-penny style of tracking? Did you learn anything? And if anyone else has had the burying-your-head-in-the-sand experience, please tell me I’m not alone on that!
We’ve been tracking our spending to the penny for about a year now. The first few months, I kept thinking one of us was inputting something incorrectly. We were so convinced that we were saving half our money that it was really hard to realize we were not. Mr. P used to get kind of stressed out by number fixation, but now we both find it pretty motivating. After running September’s numbers yesterday, he actually uttered the words “Maybe we don’t need cable.” Be still my heart!
Hahaha I have the *exact* same reaction to frugal statements! You want to cut down on our grocery spending? SWOON.
I’m coming around – slowly – to the motivational side of things, haha. It is unquestionably nice to have a clear look at how I’m actually doing on my goals, as opposed to just thinking I’m doing OK and leaving it at that. I also know that I’m being a lot better about my spending already, just from the short month of tracking. I can’t wait to keep it up and see what a year of this looks like!
I am sooo in the burying my head in the sand stage. I think I am similar to you. I am doing well with my goals, but scared to look at the details. I’m planning to overhaul everything for October, and this post is the perfect intro! I’m going to do it, I’m going to track everything 🙂
Oh that’s awesome, I’m glad I’m not the only one! I’m sure you’ll be pleasantly surprised when you take a close look at things – and seriously, don’t worry if a few days in you want to go back to head-in-the-sand status! Just hold on to the receipts and go back to it when you’re ready. I can’t confirm or deny, but I hear a glass of wine can be helpful…
Haha in all seriousness, I’d love to hear how it goes for you! Make sure to keep me posted – and have fun with it!
I used the “urge” app when trying to control my clothes spending.
Now that we have a budget, I know exactly how much I CAN spend and keep it in my head.
If I had an iPhone, I would use every dollar plus app for sure.
I haven’t heard of either of these but I’m totally going to check them out! I’m that stereotypical millennial who’s always within arms reach of my phone, so apps are a really convenient solution for me, haha. Thanks for the suggestions!
This is a perfect post! I have been tracking our house spending religiously but all other spending I’m “head in the sand” stage for sure. I was thinking that I need to track things better on my way into work today so that’s what I’ll do! Thanks for the push!
Oh that’s so awesome Katelynne, thanks for sharing that with me! I know the spreadsheet thing worked for me, but I’ve heard good things about good old pen and paper, and some people do really swear by Mint – I hope you find a system that works for you! (Let me know too, I love hearing about how it goes for other people!)
Nice insights, Des!
We’ve been tracking our expenses for a few years now (almost a decade, actually) and it’s just became one of these adult things you have to do so no-way-to-escape. It’s part of our day-to-day lives now, and it’s a super-important one.
Things just get better with time, I can tell you. Keep up the good job and you will see the fruits soon enough!
Thanks Dan! Hahaha I love how you put that – “just one of those adult things you have to do”. I feel like my 20s has been a series of figuring out those things! They should really just give you a printed list when you graduate from high school. (I would have said university but man, some of the things I can think of – including tracking your spending – would have been useful in post-secondary too!)
I can’t wait to keep it up and see the results over time too. I’m going to have *so* much nerdy spreadsheet fun, haha.
This is something I’ve tried & failed at on multiple occasions. As much as I advocate for a good balanced budget, I hate tracking every single thing I purchase each month because it becomes a chore and in my eyes, is too much work haha! Maybe I’m lazy though, because the way you’ve broken it down seems extremely helpful. Never too late to try, try again I guess!
Pfffft no *way* would anyone in their right mind call you lazy! Your blog posts are simply too good for that to be the underlying cause 😉
Getting into tracking took me forever, and honestly if I hadn’t publicly stated that I was going to go all in and track my spending down to the penny for the month, I totally would have bailed mid-month when I started to avoid it, haha. The power of blogging I guess! I just kept telling myself that it was only 30 days, and now I’m actually looking forward to keeping it going. Let me know if you do decide to go for it (or blog about it!)
I don’t personally use it but for budgeting i hear a lot about YNAB https://www.youneedabudget.com/
But it is not free (beside a 30 days free trial).
I’ve heard a lot – like, A LOT – of great things about YNAB too! I’m honestly thinking about asking for it for Christmas, which is probably the nerdiest thing I’ve ever done. But so many people love it, and I adore their concept of working towards using this month’s income to pay for next month’s expenses. Thanks so much for the suggestion!
If you talked to me about eight years ago, I was burying my entire body in the sand! I just didn’t want to know. These days, I’m a down to the penny tracker every single day, and I agree with you, it’s an eye opener. I think your exercise is a great one everyone to do.
Hahaha oh man, I have been there! I think anyone who’s never been there is lying, or should really start a personal finance blog.
Thanks so much for the encouragement – I definitely agree it’d be a great exercise for just about anyone! It’s the only way to get a really good handle on where your money is going.
PS. I love-love-loved your “Our Next Life” post! I’m working on one now and volunteering with animal shelters will be a big part of mine, so I loved seeing that in yours!
Thanks! I’m such an animal lover; in fact, it’s what I work in the field professionally, but I’m administrative so I don’t get much hands-on pet time like I used to. I plan to dedicate more of my time for free to that side of things once I’m able to.
That is *so* awesome that you work in the animal care field! Growing up I was convinced I would end up being a vet until I figured out that a) I’m a giant softie and could never handle it, b) I’m not very good in science and c) the inside of bodies – human and animal – freak me right out, haha. I know there are other ways to be involved in the field, but for now volunteering on weekends has to do (in addition to my at-home doggie snuggles, that it!) I’m looking forward to the day when I can spend all day working with foster dogs 🙂
I felt that way at the beginning of the summer. I don’t often check my budget throughout the month, but since I was only part time employed, I was trying to stay within a $500/month budget. On the first day of this new system, I signed up to renew a bunch of first aid certifications for work and blew like $115 on them. It all felt so futile from then on.
$500 is SO hardcore, that’s amazing! Even though I completely know that feeling – the “oh my god, there goes a giant chunk of money, what am I even doing” one – it’s still awesome that you’re aware of it. There was a huge amount of time that I spent *not* tracking or even noticing where big chunks like that were going, and it’s great to notice it now.
Thanks so much for the comment, and for hosting the link up Mel – I love your blog, so I’m flattered you read mine!
I used to track my finances in a rough sort of way, but when I met my wife 10 years ago, I converted to her down-to-the-penny manual-entry Quicken system and haven’t looked back. It’s amazing how much you can learn from detailed tracking, especially when you do it over a period of time. Now I can do super-nerdy things like compare my grocery spending last year versus the previous year and try to determine if the change is from rising prices or not paying enough attention to the budget. I know most tools these days (including Quicken) allow you to simply download your transactions from financial institutions, but I find that entering them manually helps us keep better connected to our finances, plus we catch the occasional error from the bank.
That’s awesome Gary – I can’t even wait to have that much historical data and track trends over time! I have to say I’m also a big fan of the manual entry, because even my somewhat-haphazard categorizations help me notice inconsistencies and make a note of them as soon as I enter them. For example, a big chunk of groceries this month was actually for a birthday party we hosted, so I made a note and didn’t include that in the normal grocery category. Had I waited until the end of the month, it definitely would have gotten lumped in with the regular groceries, and I’d be left scratching my head about why we just can’t seem to get below $600 a month from groceries.
I’ve never gone that hard-core, though I agree that it might open our eyes a little.
It’s definitely an undertaking, haha, but honestly now that I’m through the adjustment period I’ll probably keep this level of tracking going for a while. It’s fascinating! But then again I’m nerdy like that, haha.
It’s amazing all the good tracking does! And those periods when things are not going according to plan are the easiest to bury your head in the sand. Unfortunately, they’re also the worst time to do it! Way to be with all of this. That’s a huge savings on the grocery front! I’m excited enough for you to comoensate for the dog and boyfriend. 🙂
Thanks so much! I’m SO thrilled about the groceries too, and the beauty of the personal finance blogosphere is that people actually get it, haha. When I get really excited about this stuff with friends their eyes tend to glaze over. Also, I absolutely love your blog – thanks for taking the time to read this and comment, I’m flattered!
I’m eager to hear how Cait’s program goes! And man, tracking to the penny is EYE. OPENING. Everyone should do it at least once, to help break some of those automatic spending habits. But, I’m not eager to relive that self-scrutiny any time soon. 😉
That dog insurance seems like a good compromise. We’ve always read that those plans are a rip-off, but you found the canine equivalent of catastrophic coverage, and I can see how that would give you peace of mind. But here’s hoping that you have enough saved next year to feel like you don’t need to renew the policy!
I hope so too! And I love that phrasing – it’s *definitely* in the realm of catastrophic coverage. I’m really only counting on it in the worst case scenarios, and I can’t imagine paying the crazy monthly fees for the kind of insurance that covers prescriptions and regular checkups. That stuff is NOT cheap!
And so far I’m loving Cait’s program! Honestly, my favourite part is sitting down at the end of the week and trying to answer the question, “What was the best money I spent this week?” It really frames things in a totally different light, and has already brought up some interesting things for me! I’ll do a full recap at the end of the month 🙂
I start in march of this year to follow my cashflow. I learn a lot! For example I did have enough money for my emergency fund. Currently, eating out is the category that I find most difficult to control.
I use mint + Excel to follow my CashFlow and my Balance Sheet.
Great blog!
Thanks Don! Eating out has been a tricky one for me too – I don’t spend a ton on it, but when I do it’s always a wonderful time with friends and family, and I hate to say no to that time. I guess for now it’s just going to keep being a part of my budget 🙂
Edit of my comment:
For example I did *NOT* have enough money for my emergency fund… I fixed that after I started my budget.
I try to spend max $100 eating out each month.
I was in a similar position when I started tracking my spending a few months ago – I knew I was not in debt and saving every month, which is probably why tracking never seemed that urgent to me. But it was so eye opening! Just one example: I thought I never ate out. But you can’t spend 70€ never eating out! But I did, so that never things was a fallacy. However, thanks to tracking and better planning (bringing lunces, etc.), I have been able to cut that number in half…
That’s awesome Sofia! And oh my gosh yes to being surprised at the tracking. I had the exact same reaction to seeing how much I actually ate out – and when I look back at last winter, before I started tracking, I am AMAZED at how much money I spent in a month! Literally double what I spend now, and I’m no more or less happy for it. That’s why I recommend it so strongly to people – it’s always eye-opening, even when you think you have nothing to learn!
Thanks for the comment 🙂
Pet insurance – I personally don’t have pet insurance but I can understand people wanting it for peace of mind.
My Dog needs surgery (torn crucial ligament) it will cost $3200! Or I put him down (not happening). Lucky I’m a smart cookie and saved an emergency fund! We are able to pay for the surgery and still have money left over! However, if I did not have the emergency fund in place I would have had insurance only until I built an emergency fund up.
I looked into see if I would have been better off with pet insurance… Nope, over the years I would have paid $5400 in insurance and still have to pay an extra $600 because crucial ligament are only covered up to a ceiling.
I know some people will think I should put him down but I can afford it and it wouldn’t feel right knowing that I could have saved his life with the press of 4 buttons on an EFTPOS machine. Plus I would have some explaining to do to my kids 😉
Oh no! Poor dog – that must not be a fun time, with a leg out of commission! But so good on you for having the money ready for it, and for doing the cost-benefit analysis of insurance. For me the insurance really did boil down to a stopgap until I save up a more robust emergency fund, because tearing a ligament is exactly the kind of thing I could see The Dog doing – especially since the first time we took him to the dog park he cut his paw on some glass and the stitches ended up running us $700, lol.
High fives for being a responsible pet owner though, and I hope your dog makes it through surgery with flying colours!