In 2017, I want to track my spending.
When I was digging out of debt a decade ago, I made it a habit to track every penny that I earned and spent. This was one of the keys to changing my relationship with money. By logging every expense, I was able to discover where my money really went (as opposed to where I thought it was going). This allowed me to make changes to my life that led to financial independence.
Today, I’m financially independent. I have enough saved and invested that I should be able to support my current lifestyle indefinitely. Based on numbers from my favorite online retirement calculators, my nest egg will support spending of around $4000 per month for the next forty years. I’m under the impression that I spend about $36,000 per year (or $3000 per month), so I should be safe.
But do I really spend $3000 per month? And even if my spending is that low, are there places I could cut back? Am I wasting money on anything? Are there steps I could take to spend more efficiently? That’s what I aim to discover by tracking my spending this year.
It might surprise you to learn (because it certainly surprised me!) that many Money Boss readers are eager to follow this project. In fact, I get more email about this subject than anything else right now. “When are you going to start tracking your spending? What tool are you going to use?” I didn’t realize there was so much interest in this or I would have done it long ago.
Before I can begin this project, I need to do two things:
- I need to establish a baseline. That is, I need to gather all of my account into one place and determine what my starting numbers are.
- I need to pick a tool (or two) to track my money. Do I return to my old friend Quicken? Or do I try one of the new-fangled smartphone apps?
I’ve been working on both of these tasks simultaneously. [Read more…]