Jump Start Jan: Personal Finance Week: Day 3

day 3 spending diary personal finance week Jump Start 2014One of the most useful building blocks of healthy money management is the process of monitoring your outgoings. That’s why today’s simple and easy activity is to start a spending diary.

This will only take you a few moments to get going. All you have to do is make a note of everything that you spend, above and beyond your regular bills, and keep that going for at least seven days. If you really want some interesting insights into your own spending behaviour, carry out the process for a month – you might be very surprised by the amount you spend on certain categories of purchases.

Ideally, make your spending diary something that you can keep with you throughout the day. That way it’s much harder to forget to note everything down.

Make it as high tech or low tech as you like. For example, you could use:

  • The back of an envelope
  • A small notebook
  • A smartphone Notes-style page
  • A smartphone or tablet budgeting app
  • A Filofax expenses form
  • A page in any personal organiser

Just use whatever you have to hand, you don’t need to buy anything especially for the purpose.

Write down anything and everything, including lunches, groceries, nights out, bus fares, petrol costs, entertainment, gifts, clothing, postage, charity donations and whatever else you’re spending your money on. In seven days you can review the spending diary and add up any totals.

Spending diaries can help in three main ways:

  • They show how much you actually spend, rather than how much you think you spend (some of us underestimate our spending more than others…)
  • They give you ideas for areas where you might be able to cut back
  • They help you to monitor and modify your spending behaviours as you go along – you may feel more accountable each time you spend

What’s happening here?

I’m using a very plain and simple notes page on my phone. The reason I’m not doing anything more complicated than that is because the budget here is pretty strict for January, and there will be a few days where I’m hoping not to spend anything at all. Very few plans for going out as I seem to have picked up Beau’s head cold, and if I do get anything in the sales it will probably be nearly all via vouchers or store credit.

However, you never know what might turn up, and there may well be an emergency purchase or two to be made. It might be interesting to find out how much contingency spending I need to build into budgets for future months.

How are you going to keep your spending diary?

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  1. I’ve now been doing this for about a year, when I think I saw you suggest it, and it’s made SUCH a difference to my spending. I still get myself treats, but I’m not spending anywhere near as much, and I can see when I’ve been frittering it away. The action of writing it down means you have to think about it again. It’s a great step to take 🙂



  2. Hi Sophie – thanks for your comment. So glad to hear that you’ve found keeping a spending diary so useful! It’s definitely a good way to spot when you’re going off track with any money-saving plans you might have made.

    Penny x

  3. Hi Penny

    New follower – love the blog! Will definitely be doing this!


  4. Cheers Phryne, a spending diary can be a very useful tool and the results are sometimes surprising.

  5. Started diary at beginning of Jan. It’s scary when I start to add up all I spend in extra bits for food over and above my weekly shop. The diary is definitely stopping my giving in to takeaways.

  6. Hi Debbie – thanks for commenting. My first spending diary a few years ago was scary too, but the simple act of keeping one eventually has a positive effect on your spending so keep going, and best of luck. The small food shops are easy to forget all about when you’re budgeting, but the diary shows you how it all adds up.

  7. Fantastic idea, I try to do this weekly but as you said its so easy to forget/underestimate certain costs. A daily one on your phone would be super easy and really help with budgeting. Thanks for the post 🙂

  8. Hi Maggie – using a notes page is really easy. The best bit is that your phone can email it to you at the end of the week too, if you’re keeping longer-term records over time.

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