Thursday, January 5, 2012

The Anti-Budget-Tracking Expenses First

Now that the new year is officially here, I've begun some budget planning in earnest for the coming year.  In the middle of this process, I realized that I really don't know what everything costs.  Without knowing that, it's difficult for me to budget-at least in any realistic since.

I've been very bad when it comes to tracking expenses this past year or so. In theory, I have Quicken, and I use it.  The reality is not quite so absolute. I've taken large ATM deposits and spent them without keeping specific track of where they went. I've had cash payments for quilting work done, as well as personal checks that i simply cashed and spent.  There was a period of time that Quicken seemingly lost after my upgrade from Quicken 2007 to Quicken 2010 (If you haven't upgraded-don't!).  All in all, my spending records for the past year or so do not tell the whole story.  Time to turn over a new leaf.

There are some good reasons for me to do some expense tracking:
  • In the past I've seriously mis-estimated the amounts that I spent in the past in certain categories (especially transportation). While I can make a goal of spending less than in the past, I need to be realistic about what expenses will be
  • I can see if I am "spending on what I do" rather than on what I think I may or should do.  Last year I spent quite a bit of money on gardening supplies, but did little to no gardening.  That's a wake up call to me that I need to start gardening, stop shopping, or in this case, do both.  This is just one example.
  • I can see if I revert to emotional spending habits, and I can make sure that my spending is in agreement with my values.
  • Because I will download the results quite often, as well as printing out written reports, I'll have an immediate reminder of my spending. That may or may not have a direct result on my spending, who knows.
  • Finally, it will, hopefully, move me to keep track of any and all income.  Because I have a variety of small income streams, in the past I have not always documented these amounts.  Money from small craft fairs, rebates, income from online selling-these were never logged in as income. As a result not only do I know my true past expenses, I am unsure of my true past income.
For the moment, I have a rough spending plan for the future year. That combined with some expense tracking should eventually give me a true road map for the next year or so.

Coming next-working on those so called "fixed expenses".

2 comments:

  1. Barb, I am a religious user of Quicken and update here and there. Have the 2010 version now but am not updating to 2011. I am very good about tracking all expenses but it doesn't mean that knowing where the money goes means I am more careful of where it goes. I need to tighten that up considerably. When I looked at the totals for a few of my 2011 categories I was shocked at what I had spent. It all takes work, doesn't it?

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  2. I've been using Quicken for 15 years and am very faithful about it. We put almost all our expenditures on a credit card and then pay it off each month - and every other year or so we have enough points on it to go to Europe.

    I'm actually looking forward to seeing how 2011 went overall, since it was our first year of not working.

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