Posted by Tim Stobbs on November 2, 2011
Being an engineer for my day job does have some particular problems for me…I’m a bit of data hound. I like data to help make decisions (even when I don’t always follow what the data is telling me). This has lead me to try something rather extreme in my view, but regardless of that fact I really want the data. So for all of 2012 I’m going to track my spending…every damn cent of it. I did something similar before back in 2007 for a month (see here).
Overkill? Perhaps for some subcategories like our cash spending, but in general I will be keeping a closer eye on the outflows in order to give me a sold data set on what I’m actually spending. After all if you have read this blog or my book you will know the foundation of any retirement plan is not your income, but rather what you spend each month. What I find particularly interesting about this experiment is my wife wants to do as well. In her case, she wants some black and white information on where her spending cash going each month.
This tracking project is going to be one of my goals for 2012 along with the obvious one of paying off the remainder of my mortgage. Yes neither goal is particularly sexy, but that doesn’t bother me. After all, getting to financial independence isn’t about flashy goals, but rather a long hike where you get to enjoy the scenery and still get the job done.
I would like to personally thank everyone for helping out Sheryl last week with ideas on how to track expenses. I was taking notes as well for potential ideas. So far my plan is to use an existing spreadsheet I already have to help track our spending. What I’m struggling with at the moment is what graphs/reports should I generate from it? Do you use any reporting functions for your software? If so, what do you like to see (pie charts, line graphs…)? I’m currently leaning towards a classic wall chart style with income, spending and investment income per month.