“C’mon, you only live once!”
That’s something you say when you don’t really care. For those of us who set their minds to taking control over their budget, it’s important to track all expenses down to a penny (not to be confused with becoming a penny pincher). This way, you can rely on statistics and figure out what you should do next.
“You want to keep track of expenses? Jesus, just write them down or something, I dunno. You and your problems.”
That’s true and also not true: the trick is to make tracking as easy and automated as possible. You may want to look at all the options and see what fits you best. Most people divide their monthly budget into product categories: £100 to vegetables, £30 to dairy products, and so on. It can be a tiresome task, though. Instead of tracking categories, try to set limits on what you’ll spend at Tesco and every other store you frequently shop in. It’s guaranteed to save you some time and motivation.
“It’s guaranteed to make you sick after a month or so. Can’t you avoid writing things down altogether?”
As a matter of fact, you can! Call this lazy budgeting, but it may be helpful to have a separate spending account — a Dzing card will do just perfectly. With an account devoted to the essentials (estimated taxes, bills, insurances, etc.) you will know that all the rest is your sandbox and you can feel safe. Figure out a loose budget for it and just slow the spending down a notch if the balance gets low prematurely.
There is another method that involves envelopes (or books, or whatever). There’s got to be something you splurge on almost daily and forget about it until you add it all up and feel bad. See if taking cabs or buying lattes could be avoided by better time management or eating habits, and put the amount you consider reasonable to spend on it in an envelope (or a book, or whatever). Take from it whenever you feel like it — until it’s empty. In time you will learn to track your spending on these things and maybe pick up a habit or two!
“Sit down, I just had a business idea! What if there was an app that did all the tracking for you? We’ll be swimming in cash in no time, I know an investor who — ”
I hate to burst your bubble, but there are tons of apps like that already. It’s 2019, for God’s sake. They let you customize your budget, show statistics and send you all kinds of alerts. You could argue that this is the most modern way of tracking how much you spend, but get ready to face an almost impossible choice between the apps. As always, there is no best option, especially for free.
“I bet my gas expenses are crazy! I need a spending account, for sure.”
There’s really no right or wrong here: you can combine any and all of these methods until you find what works best for you. In the end, tracking your expenses is not the goal, but just a means of achieving a healthy budget (and a happy living).