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Friday, March 31, 2017

Tracking Every Damn Cent

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.

Comments

8 Responses to “Tracking Every Damn Cent”
  1. Steve says:

    I use an old copy of Microsoft Money and it has the ability to customize reports. There are two that I find incredibly useful that I would encourage you to think about creating.

    A year over year crosstab showing years across the top and all my income and expense categories and subcategories along the side. That way at a glance I can see the yearly trend of all our categories. I can see how my gas costs have risen over the past decade or how much I’m wasted on cable television or how my dining out has decreased because of our conscious decision to curb that appetite . . .

    Likewise, I also have a second report which shows me a YTD picture but broken out by months along the top and categories along the side.

    I’m pretty sure Quicken, Mint and all the other programs out there will have something similar. It may not be as flashy as pie chart but the numbers themselves are very revealing and I can always drill down into a category to see the actual purchases that aggregate up to that number.

    Good luck with the tracking plan. I think it’s a worthwhile goal and one you’ll find very illuminating.

  2. Ross says:

    I’m sure as a quirky engineer you can do it. My roommate during university was an engineer and had a quirk for healthy living. He spent hours calculating the number of calories he would need to maximize his workout and calorie burn. He would actually measure out his lunches and snacks for each week by weight. He even weighed baby spinach and the other components of his salad to ensure that he was getting the right calorie intake, with exactly 1.5 tablespoons of salad dressing to go on it to make sure he did not over endulge. I wonder if there has been an engineer who has kept track of every minute of time spent in a year? hmmm…..

    Thank you for reading my unrelated rant.

  3. I’ve been tracking every single cent of my money since I started my journey out of debt in 2006. My best friend throughout the entire process was Quicken Home & Business. The graphs, charts, and ways you can break down your money through drill-downs are incredible, and definitely helps to see where everything is going.

  4. SecondCor521 says:

    It’s not overkill in my view. I’ve done exactly that for nearly 5 years (I’ve spent $16,980.54 on food since 1/1/2007, for example). I encourage you to stick with it; you’ll be able to understand your finances in ways that most people can’t, which will help you make more data-driven decisions about your future plans. Good luck!

    2Cor521

  5. Canadian Dream says:

    Thanks for the support and ideas everyone. I’m going to have to investigate MS Money now.

    Tim

  6. gcai says:

    I second the last 2 comments – we’ve tracked ALL expenses since we married (27+ excellent years)and the data is very enlightening.

    I’ve found simple works best – get receipts for everything (and I do mean everything even if you have create a slip of paper with amounts ) then capture that data daily to a simple 1 page sheet with the expense categories you’ve set up ( I have about 30 ) – transfer the 1 page capture sheet data to a spreadsheet monthly – aggregate yearly within the spreadsheet and further to year over year if desired.
    My concern with using packages is their life cycle – how do you get the data when the software disappears/is no longer available etc.?
    BTW if you do the math you’ll see PCs weren’t around when I started (at least I didn’t have one) and this system worked just fine using pencil,paper and optionally a calculator.

    I prefer straight numbers and % changes to graphs/pie charts but each to their own.

    and yes I’m an engineer. :-)

  7. Sheryl says:

    I’ll be sure to submit a fill report on the tracking method that I like best!!! lol

  8. Vasile says:

    @gcai: that’s a legitimate concern. I bought MS Money some 7 years ago, and I was a little taken back when they discontinued it. However, the good news is that they provided a free standalone version, so it doesn’t depend on any online server (BTW, that’s one of the reasons I don’t like Mint). Better still, you can use GNU Cash, which is a live open-source project and less probable to disappear.

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