I’ve never done a strict budget analysis. The truth is, I am not good at this kind of thing. I do track some of my purchases but not down to the penny and I certainly don’t count every coffee, thrift item or treat I purchase throughout the week.

A friend of mine uses an IPhone App to track his daily purchases and he tells me that it’s really easy to use and very effective. The first month, you’re not supposed to set a budget but rather view your spending habits. He told me that he’s learned a lot just from a month of tracking his usual expenses. Usually he’ll input the numbers into his IPhone right after he’s made a purchase or he’ll keep the receipts and do it later. Though I believe that doing it right away is the best idea. He told me that after the first month, you start making some hard decisions as to where to cut back. That’s obviously the tough part for most of us. I saw how well this worked for him and I decided to take the plunge too.

I used to be very good with money for the most part but when depression hit me quite hard last year, I started not caring anymore and was spending more than I should have been. At least I’ve caught it in its tracks. The worst part, is that I was spending and not earning a whole lot of money. Writing and Airbnb hosting won’t always make you rich (but it will definitely make you happy!)

So as of yesterday (April 1st), I’ve been tracking all my spending. And trust me, once you start doing this, you’ll think before you buy.  I am using the spreadsheet from Open Office to track everything. Once I’m done, I will hand it over to my finance expert partner and have him organize it. (he’s a wizard at this!)

What will I get out of it?

First of all, I want to view my spending habits and change things around if need be. As of late, I am sure that I’ve been spending WAY too much in cafes as this is where I do a lot of my work.

I started going to a good place near my house which serves inexpensive coffee roasted on site! Two coffees here will only set me back $2.20 ($1.20 + $1 per each refill). I estimate my coffee costs to be roughly $15/week now if I lay off the espresso and drink brewed (sniff!). $60/month on coffee isn’t too bad since I am a huge fan of the stuff and I need to get out of the house to work. I go nuts if I sit home all day.  I need people’s energies around me to work. I also don’t socialize at all where I live, so I can justify spending this money as I don’t go to bars, restaurants or events. (I do those things with my friends when I am in Montreal and Toronto). My entertainment here usually consists of: Netflix, watching Documentaries or TED talks online, reading on my Kindle & magazines or listening to Radio Canada in French on my shortwave radio. None of these really cost anything. So that $60 can be my monthly entertainment money. Not bad right?

I also spend a lot on thrift clothes ($80/month?). Perhaps not nearly as much as some people spend on retail clothing but I feel as if this is an expense that I need to curb. Hopefully tracking everything will make me think a lot more about purchases.

WANT MORE INFORMATION & TOOLS?

Here is another great article by The Simple Dollar called: Record Every Penny You Spend in a Month

Get Rich Slowly also has a great FREE simple Budget Planner: Can  be used with Open Office, Excel or Google docs!

I am looking forward to writing about this a month from now to let you know how it all turned out. Wish me luck!

DO YOU TRACK YOUR MONTHLY EXPENSES? IF SO, HOW?

Pie Chart from Fabulouslybroke.com