It's not that I don't think that tracking expenses is valuable, I do. But I find that daily tracking is far too difficult and time consuming. And more importantly, I think that trying to do this has taken my attention away from earning extra income and cutting current expenses. Instead of going through my receipts trying to remember everything I spent for the day as well as checking our on line account, I think my time is better spent going through the flyers looking for good deals and cutting coupons, or going through my house finding items that I could return or sell on ebay.
Another reason that I think I can avoid the daily tracking of expenses, is that I use the cash envelope system for all our monthly expenses (except bills we pay online, gas for our cars which we pay at the pump by debit, and preschool tuition we pay by check). At the beginning of the month I withdraw all the cash we will need for the month (for groceries, for gifts, for spending money, for school lunches, for Friday night pizza, etc.). By doing this, I have in effect, already tracked my spending. I have a limited amount of cash and I don't spend more. If I needed to spend more, then I would need to track that.
So, my new plan is to track my actual spending monthly.
I am going to take the time at the end of each month to compare our actual spending to our budget for that month. This should take a lot less time and will hopefully be just as valuable.
How do you track your actual spending?
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Read more on this topic in Trouble With Tracking and Your Money or Your Life (Part 1).
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