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Do you remember the first time you started tracking your money?

by J. Money on Thursday, September 16, 2010

my shocked face

I got a comment on last week’s Family CFO post, and it totally reminded me of the first time I sat down to run the numbers.  So scary!!! Haha… From Brandon:

“This post was enough to get me to sit down and track my expenses for the last year. I’ve been putting it off because I didn’t want to see the results. They’re definitely cringe worthy… It’s time to get this financial house in order.”

Sound familiar? Do you remember when you first sat down to REALLY track things? (I do – it was in late 2007 when I realized I needed to figure out what the hell owning a house was going to do to me!  How backwards is that?)

If not – Start now! If you don’t know what you’re working with, how are you supposed to know if you’re doing better or worse, or even close to being on track?  I swore off budgeting and tracking this stuff for 27 years until it finally hit me.  If you’ve never sat down and literally written out exactly what you have, and where, it’s time to own up!  Grab a paper, an excel budget, whatev – just DO it.

If you remember – How did it make you feel?  Were you expecting much better results?  Worse results?  Personally, I was kinda surprised in a few areas. #1, I learned that I was spending WAY more than my mentally budgeted $500 “life” fund.  It was more like $800 every month!!  I was also getting creamed with random spending – something I never added up in any given month, but was totaling about $150 every month.

The one GOOD thing that I realized though, was that I was actually building up my 401(k) a bit!  All those $50 deposits every paycheck were starting to accumulate (this was before the 100% matching deal) so the news wasn’t totally bad. I also wasn’t in *as much* credit card debt as I had originally thought, although I was certainly in some which wasn’t making any sense.

The point is, without understanding fully what your finances look like you can’t pinpoint future successes or failures. You need that snapshot to really understand the overall financial picture.  You start that now, and every month going forward will bring you closer and closer to financial freedom – even if it takes you a while. As G.I. Joe likes to say, knowing is half the battle.


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{ 25 comments… read them below or add one }

1 BudgetBabe September 16, 2010 at 11:03 am

I started tracking my budget in 2007, too! It was when a friend introduced me to Mint.com, and I felt I had no excuse! It was too easy…but that led to a lot of hard realities for me to face. I was spending too much on coffees, lunch, shopping, etc. So I buttoned up and started monitoring my spending. It came in handy when my husband was laid off a year later. Now, we’re in great financial shape – a solid emergency fund, contributing to retirement accounts (working on upping it though) and no credit card debt! Woo hoo for minding your money!

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2 Ashley September 16, 2010 at 12:14 pm

I’ve always tracked my money. Even when I was spending every dollar I made from my paper route on New Kids on the Block magazines. haha. oh man… those were the days.

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3 Nick September 16, 2010 at 12:22 pm

I started getting religious about it a little over a year ago (right about the time my son was born…). But I always kept a close eye on my wallet and my money (which was not particularly difficult considering my wallet is more elusive than the loch ness monster… if you spot it, take a picture because you won’t see it again for a while :)

Mint.com certainly helps too. Good stuff.

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4 momcents September 16, 2010 at 12:33 pm

I started keeping meticulous track of my spending in March of 2009. There were some items that were just embarrassing. Like the fact that I was paying two different companies for virus protection on the same computers. Meanwhile, that’s now a service you can get for free. The budget was running in the red and it definitely scared me straight. Glad to say, it only took a year and a half to pay off all our debt ($108,000, to be exact) and the budget looks awesome now.

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5 Brandon September 16, 2010 at 1:13 pm

I remember it like it was last week… oh wait… it was.

But yeah, it helps to know what happened to all that money I’ve made this year. I’d tried previously but I think many of the budget spreadsheets are a little superfluous for just tracking spending. I just hopped into my bank account online and printed out every transaction for the last year. For the purpose of this exercise I divided my spending into some rather broad categories to get a bird’s eye view (eating out, groceries, bills, other, gas, and medical). I then added those up to monthly out flow and had another cell for all the money that went into my account for that month. Lastly I made a difference row. My method wasn’t perfect because I get paid on the 15th and last day of the month. So a check I got on August 31st is going to be used for September expenses, but it’s still filed under August. that made the numbers a little screwy. Seven month of the last year I have a negative number for the difference. Of course the extra goes to the credit card I had linked to that account in college (bad idea). Anyway, last week I also set up an ING Savings account and started depositing money to building up an emergency fund. Next stop will be paying off the car, student loan (I made it out of college with only $5K in student loans), and a couple of credit cards.

On an interesting side note I was looking at my check yesterday and all my overtime this year has been spent paying the Federal Income Tax.

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6 FrugalRichLife September 16, 2010 at 1:15 pm

I started tracking my expenses right after college, which was almost 5 years ago, since I started having a regular income and I needed to pay off my student loan. My friend later introduced me to Fidelity.com, where I started my Roth IRA and also implemented the “Full View” option to view my net worth.
Since then, my student loan is paid off, have an emergency fund, building up my 401k w/ matching and Roth IRA, and keeping my credit card balances in check.
On top of that, I also track my credit card usage on an MS Excel sheet just to keep a running total so that I can limit on my recreational spending. Let’s just say my last credit check, I had a FICO score of 805, so I’m super giddy!
I’m a visual person, so seeing “the numbers” really help manage my finances.
BTW, budgeting is super sexy…at least my significant other thinks so :)

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7 Kevin I September 16, 2010 at 1:21 pm

I remember the first time I took a serious look at it, we needed a new (to us) car and didn’t want a complete clunker again so I needed to hustle up some bigger cash. I remember thinking “If I stop going into Quick Chek, I could not only get a decent car, I could change my life.” I was shocked at all the little stupid things I spent money on and all the big things I missed out on because of it. I think looking at it let me know exactly what kind of monster I was up against, there was no giant lizards crushing my budget, just a lot of pesky gremlins. A few months after that when I started tracking every dollar, it did change our life and I’m mad I put off tracking expenses that long and I’m happy I just sucked it up and took my medicine.

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8 MoneyMan September 16, 2010 at 2:06 pm

Yeah I remember, I used to spend lots of money. I would cash my paychecks and start spending. I started tracking my money and caring back in January 2009. It’s worked well so far and my net worth has taken a one way ticket up ever since!

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9 Sandy X September 16, 2010 at 2:44 pm

I’ve tracked my expenses in a journal off and on since 2003. I got serious about it in 2009 when I started using a Google Docs spreadsheet. I was more diligent about categorizing my expenses, too. My “ah ha” moment came when I looked at my food category. In my head, I figured I spent about $200/month on food (eating out and groceries); I worked at a restaurant at the time, so free food helped lower my expenses here. Despite my restaurant hook-up, I spent more than $400 on food before the month was up! I was able to pinpoint what decisions led to this seemingly inflated number: picking up the entire tab when I went out with friends and making random trips to the grocery store without a list. I’ve learned that the random grocery trip is a rather common issue, too. Have you ever been in the middle of cooking dinner – let’s say, chicken Alfredo with sun-dried tomatoes, broccoli and mushrooms- and realize you don’t have any Texas toast? What do you do? You run out to the store, get the toast, and pick up a “few” other items (let’s say, ice cream and cake for dessert and a nice bottle of wine :>). Needless to say, this happened a couple of times a month. Now, I am expertly aware of how much money I have to spend for various categories at any given time. And I love the sense of control I have over my money. It’s simply marvelous!

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10 Molly On Money September 16, 2010 at 3:26 pm

I’ve tracked my money since I had my first paper route at the age of 11.
My problem is that when I go into’ denial mode’ I start by NOT tracking certain things. I have great excuses: ‘I don’t have the time, Tracking my money doesn’t really effect the way I spend,….’ I’ve been tracking my money with honesty for about 4 years now.
It’s hard to stay honest because I believe most of the lies I tell myself!

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11 myfinancialobjectives September 16, 2010 at 3:47 pm

I started tracking my money heavily just before I started my blog, back around December of last year. It was then that I realized HOW MUCH student loan debt I was in. It was shortly after that time that I made the decision to snowball my student loan debt… Like you, I also became aware of my 401(k), and was pretty happy with the results. Finally, I was happy with my credit card balance, as it was relatively low. I change my bank account daily – at least- now, and will probably continue to do so, well, indefinitely…

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12 Briana @ GBR September 16, 2010 at 4:05 pm

I first looked at my budget at 17 on Bank of America’s online banking. Recently I looked at it again since I’ve signed up for Mint and I’m taking more precautions toward eliminating my debt

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13 Stacey September 16, 2010 at 4:08 pm

We started tracking faithfully in Excel after getting married in 2007… but after three years, we’re pretty confident about not counting pennies. We use cash to control spending on groceries, take-out and “fun” purchases (our easiest-to-overspend categories), but don’t watch our other spending too closely anymore. We found it just wasn’t worth the time. To each their own! :-)

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14 Stephanie PTY September 16, 2010 at 4:09 pm

The fall of 2006, right before my impending financial DOOM! And by doom, I mean that doing things like tracking my spending is how I realized how messed up my finances were in college, and finally decided to take some time off, instead of digging into private student loans and making things worse. All for the best, right?

I still track my expenses in the same home-grown spreadsheet to this day. Woohoo – 4 years, baby!

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15 FB @ FabulouslyBroke.com September 16, 2010 at 4:11 pm

Yes. I remember the first time I started budgeting, and I still have my budget sheets from years past to do a comparison year by year.

The jump once I started budgeting can be seen here: http://www.fabulouslybroke.com/fb-budgeting-analysis-tool/

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16 Bobby September 16, 2010 at 8:53 pm

I just started tracking my money a week or so ago, I made up a budget as well. I just moved out on my own so I haven’t had a real need to do it before and have always “paid myself first”.

It’s amazing to see how fast all the bills and groceries add up.

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17 Kevin @ Thousand-aire.com September 16, 2010 at 11:40 pm

The first time I started a budget and actually maintained it was a little over two years ago. I did it right after purchasing a car that I really shouldn’t have bought, but only realized that after the budget was made. I’ve since gotten rid of that car, and have cut my vehicle expenses in half (thanks to the budget)

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18 UHNW September 17, 2010 at 4:11 am

Your post inspired me to have a look at my own data.
I have been tracking my expenses for almost 10 years now. Raw data:
Income $2.8mil
Expenses $2.1 mil
‘Saved” 678k

Expenses include taxes of 563k.
Check it out at http://uhnw.blogspot.com/2010/09/i-was-doing-some-reading-today-and-came.html

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19 J. Money September 17, 2010 at 9:18 am

@BudgetBabe – Love hearing that! Way to get on it and STAY on it.
@Ashley – Hahahahah…. I think you’ve officially won the awesome prize today ;)
@Nick – Haha, congrats on the kid!
@momcents – I still can’t believe you knocked so much away like that, it’s great. Way to go!
@Brandon – Look what you started here :) It’s discussions like that that make me love blogging though man, I totally forgot about the pre-budget days. Here’s to the next 7 months being in the positives for you!
@FrugalRichLife – You got that straight :) And DAMN good job with 800+ Fico score!! You are killing mine! (and millions others out there), you should be proud.
@Kevin I – That is awesome. You stood up to this nonsense and made a change! One that will keep with you forever too, mad props man.
@MoneyMan – Keep it up!
@Sandy X – You had me at Google Docs ;) That 1 tool alone has really helped me too. Started on Excel but couldn’t update “on the go” – so now I can do it easily/more excitingly when I’m in the mood instead of when I make it home. And I agree w/ grocery stuff! Although you’d have to ask the wife more as she’s in charge of that ;) I only go when I’m hungry and that’s just stupid from the get go.
@Molly On Money – Hhahahaha… you are too funny.
@myfinancialobjectives – You change your bank account, or you check your bank account daily? I hope it’s the latter! haha….(and I do the exact same thing – sometimes twice a day!)
@Briana @ GBR – Mint makes it much more easier for sure, esp for all us lazy people ;)
@Stacey – Nah, I totally respect that. We don’t track by penny much either – more like in “chunks”. Yeah I think we end up spending $50 or so extra a month w/out realizing, but since we’re more financially free now it’s a luxury I don’t mind ;)
@Stephanie PTY – SEXY!! Maybe you should share it with me/us in case we wanna use it too? I could add it to my spreadsheet list! :)
http://www.budgetsaresexy.com/2009/07/free-budget-templates-sites.html
@FB @ FabulouslyBroke.com – Oooh would love to see YOUR spreadsheet too! Do you have a template we could look at? Can add that to our list too :)
@Bobby – Yeah, it blows really. That was the first time I realized how awesome my parents were for taking care of me all those years! haha…
@Kevin @ Thousand-aire.com – You the man! Sometimes it takes one big stupid decision to change our ways… for me, it was our house ;) A $360,000 decision!! haha… whatev.
@UHNW – WOW. I don’t really know what to say on that! Except that you have intrigued me, and I am now gonna go check out your post ;) Thx for sharing! Glad it inspired your own post.

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20 Dd September 18, 2010 at 10:36 am

I remember trying many many times to do this. I always managed to make it way to complicated and then stopped. How do you do it? Basic categories or just keep every receipt?

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21 Rob Ward September 18, 2010 at 3:14 pm

It was right after my wife and I were married. We literally bought Quicken the first day back from our honeymoon. She had already been tracking everything but was doing it with paper. I was taking over the finances (but had never managed a whole household budget…we got married right out of college) and wanted to use something computer based.

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22 Jaime September 19, 2010 at 10:17 pm

I just started tracking my networth this year, btw I liked that illustration =)

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23 J. Money September 19, 2010 at 10:46 pm

@Dd – Basic categories all the way. The receipts way never works for me, or anyone else I know actually. I think the key is def. making it simple and playing around with other ideas until you find a system that works. We all do it differently (I use an excel budget in google docs, for example, while others use Mint.com) but the key is testing out ways ’till you’re sticking to one. Then it becomes habit :)
@Rob Ward – That works! Awesome you picked up Quicken on day back from honeymoon too, haha…. well done, sir.
@Jaime – Thanks :) it keeps me entertained too.

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24 Oscar C February 2, 2012 at 3:42 am

Started tracking as soon as I started working. Currently making minimum (1st Job). and I have to say I like knowing where everything is going.

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25 J. Money February 2, 2012 at 10:51 am

Hell yeah! Good for you man, that’s wonderful. It took me YEARS to finally do it myself – you’re one step ahead of the game, sir!

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