Posted by Michael

You know what I just realized? I’m pacing $200 in breakfast/lunch expenses this month. $10 isn’t much in a day, but added together - thats $2400 a year… at the deli. I don’t know if $2400 is a lot of money - but spending that much on McSkillets and iced Chai seems excessive.

I only know how much I’ve blown on sweet, sweet mocha-frappa-lattes because I’m forcing myself to track every dollar I spend. Its a pain in the ass, but knowing where my money is going makes sleeping at night easier. I’m using a program called GnuCash to do the magic. It’s free and it works on a principal called double entry accounting - which, in a nutshell; means every dollar comes from somewhere and goes somewhere, and in the process gets tracked… twice. Anyway, the learning curve is steep and it takes some time to get accustomed to tracking your money this way. I’ll do a tutorial later for the folks who want to see how I’m using this joint.

I’d recommend using something free and easy; like mint.com, or even moneytrackin.com. Hell, my cousin Daniel uses an Excel spreadsheet to track his cash. It doesn’t matter how you do it - just start doing it.

Why?

This is easy. For some reason you think you have more money then you really do. Thats because you’re spending more then you think you are. The fact is - you’re forgetful, your computer isn’t. Plus; you can’t easily think in terms like “how much money did I spend on gas this year ($3,520)?”, or “what did buying magazines at the grocery store every month really cost me ($333)?”. A few clicks and your computer will tell you, and unless you’ve fudged the numbers - it won’t lie.

Look, I’m not going to do much convincing here. Tracking your money is smart, and one of the first steps in the process of getting out of debt. If you’re not doing it; start.

OK, how do I start?

Mint.com connects to your bank/credit co. and downloads your latest transactions. From there you can sort and tag transactions until its easy to see where your money is going. Supa-Easy. The only problem with mint is that you’re pretty much required to use your bank card or credit card for every transaction… and we all know that cash transactions happen. (Edit: Mint.com recently added a Split transaction feature that allows you to designate where cash withdrawn from a monitored account was spent. Better, but not perfect). moneytrackin.com lets you enter transactions and manage accounts manually, you’ll need to hang on to your receipts during the day - but entering the data is easy once you learn how to use the software.

Anyway, I’m brown baggin’ it for the next few weeks. I need to get one of those “frugal living” writers over here. Lessons on how to spend less seem appropriate.