Memo 5: Keeping a log of expenses

One key technique used in financial coaching is to help clients establish a log of expenses and budget. This is easy to talk about and hard to do. Most people will be able to quickly develop the basics expenses: house/rent payments, car payments and utilities, maybe even food. The more obscure expenses such as charitable gifts, lunch monies, clothing, haircuts, education and insurance for car and home are not often registered on a budget. In addition, there are periodic expenses that are not typical to a month, however part of annual cost of living e.g., DMV, tax preparation fees, medical, dental, etc. As a way to begin to track monthly costs, I have suggested keeping a daily log of where you money goes.  It is in principal simple, however, as a day goes on, we may forget and then we lose track of the little incidentals. At the end of the day it usually not the big stuff that eats up our monthly income, it is the nickel and dimes which in 2013 is equivalent to the ten and twenty dollars that causes financial struggles.  What did you spend today? Now write it down and track it for the month.