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Sometimes it can be really hard to cut back on spending. Sometimes you may wonder where the heck the $100 you took out from the ATM went (no, it didn't go missing, you spent it, remember??). Sometimes you wonder why you don't have enough money to spend on the things you want to spend it on. There's a way to fix this. Here's how:

Welcome to the Part Series of the Financial Cleanse.  Guaranteed to detox your financial-bowels to a better and more money-savvy you!  (I’m kidding about the guarantee, but I did use these suggestions for a more money-savvy me!)

Sometimes it can be really hard to cut back on spending.  Sometimes you may wonder where the heck the $100 you took out from the ATM went (no, it didn’t go missing, you spent it, remember??).  Sometimes you wonder why you don’t have enough money to spend on the things you want to spend it on.  There’s a way to fix this.  Here’s how:

To lose weight, one suggestion often used is to start off by writing down exactly what you’re eating.

Keeping a diary will help you realize the bad stuff you’re putting into your mouth, and allow you to reflect on when you made that decision and why, thus helping you stop eating that junk food.  Kind of like in that show The Last Ten Pounds, where the personal trainers dump a huge bag-full of crumbled muffins and pastries on your kitchen table to make you realize how many muffins and pastries you’re actually consuming.

The same strategy can be applied to purging your expenses.  Just try it for a month and see.

Write down EVERYTHING that you spend your money on. Then add these up at the end of the month.


Briefly go through each entry and see whether it was money well-spent or not.

If it wasn’t money well spent (for example, those daily lattes) then think about a way where you can cut down on that spending.  Sometimes, our lives go into auto-pilot mode, and you don’t really realize what you’re spending your money on.

I have a notebook that I recorded in since I was 17 of the various items and experiences that I spent money on.  Some months I am better at documenting my spending than others.  Nowadays you could just input your expenses into your iPhone or iTouch with a free budget calculator app, which makes it 100x easier to track your spending (though it can make it more difficult to find the history).  It’s actually quite amusing to glimpse back at what I was spending my money on way back when.

Readers, do you usually record what you spend your money on?  Do you find doing this helpful?

Article comments

evelina says:

It’s very great idea.But I also find out great app,for those who have iPhone.
Idea is that you can tag your expenses. It’s quick and quite simple to use even for me 🙂 I think that program really works, because I have already saved a little money and you always can look where you spent it.So don’t sleep and grab this app 🙂

young says:

@evelina- Thanks for visiting! What is that app called? It seems quite useful.

Craig Ford says:

When my wife and I tracked everything we spent for a month that was a huge eye opener for us. I think it should be mandatory for everyone to do it for at least one month (if you do it right you might never stop).
.-= Craig Ford

I love how you relate an accounting chore to food diaries/fitness. There are plenty of correlations between financial and physical health
.-= Roshawn @ Watson Inc

Simple in France says:

We do this whenever we’re trying to work something new into our budget. It makes you aware of how you spend your money so that you can make informed decisions. I don’t to it all the time, but when we’re in a new situation with different expenses and income, I use it until our budget becomes habit–like when we moved to France, or got new jobs, or wanted to increase savings. . .

kristin says:

I have definitely started keeping track of every penny of my expenses through a simple spreadsheet in google docs (that way I can access it from home/work) Basically from my online banking site, I input all my expenses into categories (shopping, grocery, etc) and organize it weekly and monthly.. Its based on a US personal finance website called Mint.com. I wish we had it in Canada, seems like a great tool. You have to connect your online bank though but it automatically categories each purchase and you see where your money goes.

I also have other spreadsheets that keep track of my Savings, which is great so I can project when I have enough to make a big purchase like a house or a car.

Its a lot of work but I like tracking down my expenses, it helps you become more aware of spending habits and I recommend it to everyone!