Spending diaries

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anon473

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A quick question on a topic that has been mentioned several times on this board (particularly money makeover)
When we did our spending diary (over 3 months) we found that our spending decreased (measured by the amount we had left in our current account at the end of the month). This is not an ideal measure but over 3 months it should be fairly representative.
When we stopped the diary (or let it lapse to be more accurate) the amount left in the account at the end of the month decreased again (so we were spending more).
Neither of us think that we changed out spending pattern deliberately but it seems likely that the act of accounting for every euro did make us spend less. (it was over two hundred per month).
I wonder if we really did spend less or just subconsciously put some of our spending on the long finger (so that it was no longer in our 3 month diary period). A bit of both probably.

Does anyone have any thoughts? Neither of us particularly want to do the detailed diary permanently but if thats what it takes then....


anon473
 
If I wanted to be facetious I could mention quantum mechanics and how observation affects what is being observed but I believe you are correct. I have noticed myself that if I keep a food and activity diary, I am much more concious of everything I consume and everything I do (and I tend to exercise considerably more). If I keep my spending in a diary (I even used to record it all in ledgers) I spend less (measured by bank balance impact). In essence the diary is just discipline, as in school you behave better when you are monitored, a spending diary is just self-monitoring. In fact I do use it that way, I am not religious about spending diaries but if I start finding my bank balance looking far too slender I immediately institute it, as the act of watching what I am doing weeds out the behaviours that are costing me.
 
One of the first rules of management ( and human nature )

" What gets measured gets done "

Put simply - if you give people targets to aim for they will probably work better than without any targets.

If you have no spending targets you will probably spend more that if you have a target

happy diarying!:D
 
I am new to this forum - how do you go about organising a spending diary?

I am 24 wks pregnant and have just been made redundant. We already have one child - and really need to keep spending tight.
 
Oscar, if you have a home pc a simple excel / works / openoffice spreadsheet is an ideal spending diary. Just put in a date, description and amount for everything you spend from the mortgage or rent payment to a litre of milk.

If you don't have a computer a notebook is fine - the only real advantage of the spreadsheet is that it's easier to total and analyse the data once it builds up a bit.

I myself don't use money so I have no need for one but I have trained my wife to put everything into it. She never ceases to be amazed by how much we (she) spend(s) (we categorize everything!) and it certainly makes you more conscious when you're out in the big bad world of temptation.
 
Sorry to hear that oscarbandito.

If you have no computer, what would be best would be to get a notebook. In fact that is probably not a bad idea anyway as you can carry the notebook with you and note expenses as they arise rather than trying to mentally keep track and recall at the end of the day. Use the left hand page for incoming money and the right hand page for all your outgoings. I would have three columns on each page. Date, Amount, Total.

Also date everything, maybe one date entry for each day on the first spend of that day.

And line up your income date to your expenditure date (obvious but makes it much easier)

A couple of suggestions (from my carefully budgeted student days).
Give yourself a per diem. So physically take out how much cash you have to spend in a day. Leave any change in an emergency fund jar (and try not to dip into it but do if you go over budget on a day rather than spend your medium term bills money). It also means that you have a daily entry in the income side (I found it easier to keep track when I broke it down like that)

I would suggest is that you try to budget for longer term expenses in shorter term. So instead of a monthly payment, work out how much it is per day, put that amount into a jar or somehow sequester it each day and have that on your expenditure page for the day. That way when you need to pay it, you can do so without having to impact your per diem.

Make a list of all your possible expenses over say a year or six months, it can't obviously be complete or exhaustive but it gives you a better gauge of what you need to set aside per day. (And can be used to form the basis of a budget)

For variable bills like heating and electricity, go back through your last years bills to get a feel for the seasonal usage (generally both are more expensive in winter so you need to budget maybe twice as much for them) and plan your per diem bill expense according to the time of year.

It isn't easy, it can be quite laborious, but it is comforting when you have a small income to know you've put it to optimum use and be able to prove so to yourself.
 
ClubMan said:
Asking for and keeping receipts for every purchase would be the easiest way. Then you can just reconcile these at your leisure.
Click to expand...

Reconcile and leisure in the same sentence. You almost sound as though you enjoy the task!

We tried the spending diary for a while as well and whilst we got tired doing it after 1 month, there was a definite saving noticeable at the end of the month.
 
Keeping a spending diary made for interesting reading for me anyway! I'd never kept a diary of my spending habits before this year and I'd resolved in January to do it. I kept it up for three months - I have to say it was an eye opener to see where the money went each week. It's changed my spending - and more importantly -saving habits completely.
 
Have to admit keeping a spending diary did wonders for my finances as well. As clubman suggested, I just kept receipts for every purchase and it made for very interesting reading at the end of the month.

Basically discovered that I was going to the supermarket to get one thing and ending up with a basketload of stuff that I didn't need. So now I have have the one weekly shop and the odd bread and milk purchase in the local shop. Also bringing lunch to work saved a fortune and made me appreciate those times when I treated myself to lunch out.
 
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kennyFTB said:
Basically discovered that I was going to the supermarket to get one thing and ending up with a basketload of stuff that I didn't need. So now I have have the one weekly shop and the odd bread and milk purchase in the local shop. Also bringing lunch to work saved a fortune and made me appreciate those times when I treated myself to lunch out.
Click to expand...

I think this is true for alot of people and when you stop going to the supermarket several times a week, you begin to wonder what you were ever buying in the first place. The spending diaries also highlight the difference in the price of a weekly shop in various supermarkets. Aldi and lidl begin to look much more attractive.
 
kcat said:
The spending diaries also highlight the difference in the price of a weekly shop in various supermarkets. Aldi and lidl begin to look much more attractive.
Click to expand...
Good point kcat, though I must admit I never tried that experiment!
 
I can only sing the praises of keeping a spending diary although I don’t keep one now I did for many years back in the 80’s and I suppose it trained me in the way I spend today. I have tried to get a few friends of mine to start one because to tell you the truth I’m sick of them complaining about their cc debit , when I try explain I get hit with you have to live a little. I not telling them to give up anything but they seem to think that I am. For example at the end of the first month your diary shows that you bought a news paper every day and one or two mags a week , try to cut this down to a paper every other day and one or two mags a month and if things are really bad cut them out for a while and that goes for all the other items in your diary again you don’t have to do with out just cut down for a while. Another think that I found was excellent is something that I still do today although it doesn’t stop me from buying every time is something I say to myself and to quote the author of Rich Dad Poor Dad , Robert T. Kiyosaki “is it a need or a want” you may not agree but when I get my cc statement I am always in credit.
 
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