Knowing Where You've Been

$25 for dinner at a great fondue spot. $56.64 for doggie supplies yesterday. Ouch. Beginning to add up. But on the upside, just $1.95 spent on coffee at work today since I brown-bagged it and that was my only expense. And on Saturday I spent what now seems like an incredibly small amount of money, $15, to fill up my hybrid with gas.

I know what I've spent recently, to the penny, because since October I have been keeping a spending log. I write down every single purchase. Doesn't matter if I'm buying a pack of gum, a cup of coffee, or a plasma TV. After I'm finished with the purchase, I immediately jot it down in one of those handy moleskin notebooks that you can get at a bookstore and takes up no space in your handbag.

I have to remember to do it immediately because who wants to add to the litany of facts and information we're asked in this day and age to keep in our heads. So, I try to dump the information into my notebook as soon as I make a purchase.

After doing this for almost 3 months, I can say that it's fairly well become a habit. And I think the adage is, it takes 21 days for a new habit to be adopted.

Why do I keep such a meticulous record of my spending? Is it that I'm trying to save money by shaving cents off my daily coffee. No, that's not it. Frankly, I'm not sure that saving a few cents here and there is going to help me build wealth.

Instead, I'm keeping this record because like anything else, I believe a little bit of history can go a long way. And when you're trying to become a tightwad, it's helpful to know where you've been. Have you ever had that experience of going to an ATM, getting a wad of cash out that you think will last a week only to find that hours later you're asking yourself "Where did my money go?" If you're answer is "yes", you might want to consider starting your own spending log.

It's fairly simple as it only takes three pieces of data:

• the date
• the item you're purchasing
• the dollar amount

That's it. And then once a week, I transfer the entries in my notebook onto an Excel spreadsheet. So, now I've got a big picture understanding of where my money is going and where I have opportunities to cut back on my spending or to change my habits and lifestyle. For example, I realized just how much money I was spending eating out and have since tried to change my lifestyle sot that I'm cooking my own meals at home. Not only am I saving money, but I'm eating healthier.

You're probably thinking, "Wow, keeping a spending log sounds a bit manic" or "You're way too detailed". It's certainly possible that both of these statements are correct, but keeping a log is not as cumbersome as it sounds. And the moment I started to write down my spending, I felt an almost serene sense of control. My money does not just disappear from my wallet. I am after all actively spending it and now I know exactly what I'm doing with it.

Now when I'm out and about, before I buy something I notice I'm asking myself "Do I really need that? Or is it something I want, but don't need?" If I want but don't really need it and since I'm more aware of what I've recently spent, I then ask myself, "Can my budget handle it right now?" When the answer is no, I find that I simply don't make a purchase.

If you would like to see for yourself what having a greater sense of control over your spending feels like, I encourage you to try it for a week. Just try keeping a spending log for seven days. That's it. If you don't like it, then you don't have to continue. Try it on for size. What have you got to lose? Certainly not more money.