How to Track Your Expenses

Date Posted: October 26th, 2009

The book, Your Money or Your Life (YMOYL), is great, but it doesn’t give you specific instructions on how to track your spending. The reason they give is that you need to come up with your own system, but it still helps to see exactly how people do this tracking without it eating their lives. This post will show you the how Aaron and I track our expenses for the YMOYL system. Chances are your system won’t work exactly like this one, but maybe you can get some ideas of how we do things.

Track all expenses for the Month

The way we do this is by:

• Keeping all our receipts
• Writing down non-receipt expenses (like farmer’s market, parking, etc.)
• Leave a voice note when I don’t have my planner

I take my planner most places, and put receipts inside a little pouch in the planner so that my wallet doesn’t get bulky. Sometimes I’ll put the receipts in the wallet temporarily and then transfer them to the planner later. Voice notes get transferred to the ledger in the planner.

Transfer to Spreadsheet

Aaron and I have a Google Docs spreadsheet we share for keeping track of our expenses. Google Docs is great for a few reasons:

• Easy collaboration — we can both update the file at the same time
• Online — don’t have to be on a specific computer; don’t have to merge two separate files
• Easy to import into mysql — Good for interpreting the data later

We update the spreadsheet about once a week. This is one of those nice tasks that doesn’t require a lot of mental effort.

Our spreadsheet has the following fields:

• Date The date the item(s) were bought.
• Store Where did we buy said item(s)?
• Item What did we buy? I don’t usually list every item individually unless it’s only a couple of items. If I buy a bunch of ingredients for a recipe I’ll just write “groceries” here.
• Tag What category does this fit into? Sometimes a single receipt will be in several categories. Each category gets its own row. If I bought shampoo and apples at the Kroger, there’ll be one line with shampoo (and its category) and another with apples (and its category)
• Subcategory Some categories can be further split. Wedding, for instance, is a big category. I want to know how much we’re spending total on the wedding. However, I also want to know how much we’re spending in different areas of the wedding (hall, favors, music, etc.). Not all categories have subcategories
• Amount How much did it cost? I include tax in this.
• Source Where did the money come from? The shared credit card? My personal credit card? Cash? The change we keep in the car? Useful for checking against our account statements.
• Cleared? Has it cleared yet? Have the checks been cashed? We only check this at the end of the month.

And that’s basically it for the initial expense tracking. Later this week I’ll show you how we use MySQL to get some insight into how we spend our money.

And here’s the follow up post: MySQL is Way Cooler than Quicken

Tags: Money, Self-Discipline, YMOYL.
Posted at 5:37 pm | No Comments »

How to Develop Your Inner Compass

Date Posted: October 21st, 2009

In the last article I discussed how to deal with a certain obstacle that can pop up while you’re trying to change your life: fear of success. That article assumes that you know what you want and “where you want to go”, but that’s a big assumption. Many of us don’t know. Moreover, that statement, “know where you want to go”, doesn’t quite convey the right meaning. It’s not about getting to a specific destination. No one knows the future. The goal isn’t so much that you get to any one place, it’s that in this moment you feel good about the direction in which you are moving.

So really what you need is a compass. You need a way to tell if you’re moving in the right direction. Here’s one way to develop your own.

Step 1: Brainstorm Places You Might Want to Go I’m using places in the broadest sense possible. One place could be the parent of 3 children. Another could be travel the world. Another could be to grow your favorite club into a powerful organization. Another could be to have a very musical family.

Don’t be picky here. It’s brainstorming after all. Everything you can think of is worth writing down.

Step 2: Reread your list or your mind-map and note your reaction to each item When you read “Big family” do you feel good? Disgusted? Scared? What about being at the top of the career ladder? Excited? Anxious? Put an emoticon by each of them.

Step 3: Try to find a pattern Do you notice a lot of smiley faces by the family options? By the work options? Do you notice you have a lot of work and wealth options but they all have unhappy faces. What about your hobbies? Is there a giant smiley by music or dance or writing?

Group the items that can be grouped together. All the family in one. All the work in another. Each hobby in its own.

Step 4: Figure out what subsets to spend your time on If you had to cut one out of your life, or spend only a little time on it, how would you feel about it? If it’s highly important, is it something you’re making progress on right now?

Step 5: Use your compass When presented with something to spend your time on, figure out if it feels intuitively like a good thing to do. Visualize the list you evaluated in Step 4. Will this action get you closer to the things that are important to you? You don’t have to limit yourself to just tasks that get you closer to your goal, but you should be making some steps in those directions.

Step 6: If you think your compass is broken or out of date go back to Step 1 This is an iterative process. As you grow and learn, you may find that things that used to be important to you just aren’t any more. Or maybe you’ve found something that actually is Really important. Update your compass. You’ll be much happier for it!

Tags: Career, Character-Development, Intuition, Purpose, Self-Discipline, Subconscious.
Posted at 9:02 am | No Comments »