Track Spending; Get What’s Important

Track spending = get what’s important to you. In other words, focus and you’ll get what you really want. It’s a simple connection that’s often missed.

That’s because without realizing it, it’s easy to fall into the habit of not spending on the things you actually want to be buying. So one of the easiest things you can do to set yourself up for dramatic financial improvement is to track spending — especially if you do so on a regular basis.

When you track spending, you pay attention. And the more you pay attention to what you’re actually doing vs. what you think you’re doing, the more your money will do what you want it to do.

Want to go back to school, get a new car, or take a trip to Europe?

Now matter what your goal, track spending to see where you’re at now, and then examine the results. Make sure that at least some amount of money is going toward those dreams instead of to yet another bag of chips from the vending machine.

Tracking spending isn’t about kicking yourself for blowing the budget. It’s about making sure you are putting your money toward the things that are important to you. Both fun things and otherwise. (Retirement is important too.) Despite popular belief, it does NOT have to be tedious or time-consuming to track spending. It can be dazzlingly simple.

How to track spending

So how do you track spending? The short answer is: any way that works for you. (I used the back of a receipt when I first started. Now I use a spreadsheet, because I like stuff like that.)

The long answer is, there are two basic methods:

Pen & Paper. Grab a notepad that’s small enough to fit in your pocket, and jot down a note each time you buy something. Or heck, slap a stack of yellow stickies in your pocket and use one per day. It only takes a second to write down the thing you bought and how much it was. Then you can glance over the list at the end of the day, and think about it for a minute or two. If you want, you can also add things up on a weekly or monthly basis using a bigger sheet of paper. The important thing is that you look at it regularly to see if you’re headed in the right direction.

High Tech. You can use technology to track spending too. Tracking your spending with technology can be either automated (in which case you just need to remember to look at it regularly — there’s no point in tracking otherwise!) or manual (where you input the numbers yourself). You can use an app or web site (such as Mint), software (like Quicken or Moneydance), or spreadsheets that you make yourself (OpenOffice’s Calc spreadsheet program is free, as is Google Docs).

The difference

As you continue to track spending, a funny thing will happen. One day you’ll think “Hm, do I really need to be spending $32 a month on the gym when I haven’t gone in two years? Maybe I’d rather put that toward my [whatever].” Next, you’ll take action. It’s a lot more fun to watch $32 grow into something you want than it is to watch guiltily as it flies out the window. Continue this trend of focused attention followed by action, and you’ll wake up to dramatic financial improvement — because gradually, your expenditures will align with your goals and dreams.