How and why you should keep a spending journal


KEEPING a budget can be a powerful tool for managing your finances, but it is not always easy to make. When writing up a budget, it is necessary to know how much money you spend on what purchases. A spending journal is a great way to add up and even itemize expenditures.

What is a spending journal?

ESSENTIALLY, a spending journal is a log of your total expenses over the course of one month. It could be longer than a month, but 30 days is enough to get a complete picture of your usual expenses.

When keeping a spending journal, it is important to record necessary expenses like rent and groceries and discretionary ones such as a cup of coffee or a meal at a restaurant.

Impulse purchases are particularly important, as they can quickly add up and drain your wallet.

How to keep a spending journal

THERE are two ways to go about keeping a spending journal: the old-fashioned way and the high-tech way.

Personally, I prefer the old-fashioned way, because all that’s needed is a pen and a notebook. My preferred journal is a Jofelo refillable journal when using a pen and paper. It is good practice to take the notebook and a pen everywhere to accurately track all purchases.

A more high-tech way to keep a spending journal would be to use a smartphone note application, or a similar application, such as Evernote. The important thing is using the method that works best for you, one that will allow you to correctly jot down all your purchases.

To get a more complete picture of my finances, I don’t just write down how much I spent.

I also include the date, a description of the transaction and what I thought about the purchase. Describing the purchases I made allows me to create spending categories for my budget. And recording what I thought about my purchases is especially helpful when it comes to my discretionary spending.

If I know what I am spending my money on, I know what I can cut from my budget if I need to save up something else. That said, if I know how I felt about an impulsive purchase, I can understand why I decided to buy an item at the time I did.

Why keep a spending journal?

WHETHER you have debt that you need to pay off or plan to save up for a larger purchase like a car, a spending journal can help you develop a workable budget and meet the financial goals that you set for yourself.

Think of a spending journal as a map to a certain destination. How can you get to a certain place if you don’t know where to go? The simple answer is that you can’t. You would get lost unless you had a map.

In this way, a spending budget can allow you to reach a monetary goal by helping you change your spending habits. When you have successfully tracked all your purchases, you can begin to alter your spending habits as needed. I have found it very eye-opening and empowering to know exactly where my money is going every month.

Should a spending journal be a permanent practice?

THE permanence of this practice in your life depends upon you and your individual situation. If your income and necessary expenses don’t change much from month to month, you may only need to keep a spending journal once a year or so.

This practice is essentially a tool that you can use or choose not to use. You could use the journal to craft your budget and reign in your spending until you get the hang of managing your money, or you can use it to continually assess your expenditures.

If your income is irregular, you will greatly benefit from keeping a spending journal regularly. A log of your purchases as you make them can help you cut down on discretionary spending and plan for any emergencies or lapses in income.

In the beginning, keeping a log of all your expenses and purchases might seem tedious, but like any exercise, it gets easier over time.

You may find you like the peace of mind that a spending journal can bring you and decide to keep doing it. Whatever you decide, a spending journal is an effective tool you can employ to assess your spending habits and meet your financial goals.

Fitz Villafuerte is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 93rd RFP program this January 2022. To inquire, e-mail or text at 0917-6248110.

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