The hardest part is just doing it, because there are times when we are in a hurry, don’t keep receipts, or don’t think that documentation of rather insignificant amounts of money is all that important in the greater scheme of things. But the fact is that those who do manage to keep a record of every single penny they spend for an entire month will have a practical and useful tool for managing expenses and recession-proofing their budgets.
Keep a small notebook or digital recorder handy to make it easier. Get in the habit of taking notes each time money leaves your hand, whether to pay for gasoline, buy a cup of coffee, or leave a tip in the jar at the café. Have one large notebook where everything gets listed at the end of the day, entering how much you spent and what you bought. At the end of the month, add up and categorize expenses, looking for the unexpected surprises. You may already know that you spend $75 a month for pet food, for example, but you may be surprised to learn that you spent $150 for parking meters and parking fines, $300 for lattes, or $25 for movie tickets but $80 for movie popcorn and drinks.
The reason this system works so well is that it helps to identify the money that slips through our fingers unnoticed. More sophisticated financial strategies may help manage the big expenditures, but many household budgets suffer from slow and steady erosion, not a conspicuous avalanche. Just as putting coins into a piggy bank can create significant amounts of savings over time, losing a penny here and a dollar there will likewise undermine a budget, bleed away potential savings, and create totally unaccounted for ongoing expenses.
But just as counting small calories in every meal or snack makes it easier to manage weight, keeping an expense journal helps put you back in control of your budget by making you more conscious of your money. That’s a good idea for anyone managing a budget, especially during a recession.
