For some of us, sticking to a budget is second nature. For others, it’s quite a challenge. It’s so frustrating to spend time working out a budget and trying your best to follow it, only to find that you don’t have as much money left at the end of the month as you anticipated. Or worse, that you don’t even have enough to pay the bills.
Sometimes when this occurs, it’s because of a large, unexpected expense we’ve incurred. But more often, it’s due to spending a little here and a little there. Those small amounts add up much more quickly than we realize, and before we know it, the budget is busted.
In cases like that, it’s important to figure out what’s causing the shortfall. The most effective way to do this is to keep an expenditure diary. It’s simple enough – all you have to do is write down every penny you spend, and what you spend it on.
The idea of writing down every single expense isn’t very appealing to some. But it really doesn’t take up that much of your time. Think of it like keeping track of the balance in your checking account. If you don’t keep tabs on how much you have in the bank, you could end up overdrawing and being charged expensive fees. If you don’t keep track of what you’re spending your money on, you could have trouble paying your bills, which may result in expensive late fees.
The easiest way to keep track of your spending is to keep a small notebook in your pocket or purse at all times. When you spend money on anything, write down the item and the amount right away. You might also find it helpful to write down why you made the purchase. If you find that you’re buying a lot of different things, you might see a common tie when it comes to your state of mind while making these purchases.
If you just can’t stand the thought of writing every purchase down, you could keep receipts instead. Keep an envelope with you to place them in as soon as you get them. Then at the end of the month, they will all be together for easy review.
In order for this to work, everyone in the family needs to participate. Each person could keep his own notebook to write things down in, or they could bring receipts to you so you can either keep them or record the expense.
When the month is over, go back and look at all of your expenses. Do you see any patterns? Maybe you buy a drink or snack on the way to work every morning. Maybe your spouse is buying lunch when you budgeted for brown bagging. Whatever the problem is, it will have to be addressed if you want to stick to your budget.
Facing up to our mistakes isn’t easy. That’s why keeping an expenditure diary is so hard for some. But if you want to create a successful budget, you need to do what you have to do in order to identify problem areas.
