Thrifty Tip #2: Track Your Spending

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Mr Micawber

Annual income twenty pounds, annual expenditure, nineteen nineteen six, result - happiness.  Annual income twenty pounds, annual expenditure twenty pounds ought and six, result - misery.

Mr Micawber from Charles Dickens, David Copperfield

Keeping track of your expenditure is an important step towards thrifty living.  If you don't know what you are spending, how can you possibly decide where to cut back?

There are several approaches worth considering:

• Keep a diary where you note your expenses each day
• Use a spreadsheet to track expenses
• Download an app. to your phone which lets you log in daily expenses (I'm sure there must be an app. with this purpose, but I don't have a smart phone to be sure)
• check your bank balances online frequently to see what has been spent and how much you have left for the month

Ways to make tracking expenses easier include:

• Reduce the number of bank accounts you need to manage: For personal use my husband and I have an everyday account (low to no interest) and a linked interest-earning saving account.  That is all.
• Reduce the number of credit cards you use: Ideally, have only one credit card and pay it off in full each month 
• Reduce your access to cash:  When I have cash in my purse I tend to fritter it away, so I carry as little cash as possible. After we are paid each fortnight I transfer most of the funds to our savings account, which can't be accessed from a teller machine - this is a great way to reduce impulse spending.

What methods do you use to track your expenses?  Is there anything that hasn't worked? 

This post is part of my series, Thirty Days of Thrifty Tips.