The Wall Street Journal had an interesting article today. The article compared daily tracking of expenses (with Quicken or Mint, for example) with periodic budget assessments. It won’t come as a surprise to you that I am a firm believer in the daily tracking method to keep my finances under control.
The article mentioned that one of the reasons people aren’t successful with daily tracking is that it “takes more honesty than many people can muster.” Honesty, though, is the main reason that daily expense tracking works! We have a set amount of money we can spend each week, and every lunch out, trip to Starbucks, or tank-top from J. Jill comes out of that pool of money. When we confess to Quicken at the end of the day, we can immediately see that those small expenses do add up, especially with two people drawing from the same pool of money.
Daily expense tracking is like the Weight Watchers method of dealing with finances. I imagine that the food points-system that Weight Watchers uses helps prevent mindless eating, and certainly daily expense tracking helps prevent mindless spending. Daily tracking probably saves us a minimum of $100 a week, or $5200 a year. Unless I become “Oprah Rich” someday, I need that daily dose of honesty to do my part in freeing up money for the bigger goals we have in life.
I would love to hear your take on the article, or learn about your system for knowing what money you have to spend.