Do You Really Need to Count Every Penny?

Libby Kane
Posted

tracking your spendingEveryone knows that tracking your daily spending through a tool like the LV Money Center is a great way to stick to an appropriate budget, save for financial goals like a trip to Tahiti and figure out where your bonus check disappeared to.

But the Wall Street Journal reports that experts are divided on which method of tracking is most helpful—tracking every day, or participating in limited-time tracking-sprees?

Proponents of consistent, daily expense tracking say that following your spending each and every day:

  • Promotes discipline and discourages impulse purchases
  • Makes you both aware of where your money goes and reluctant to let it leave
  • Helps you identify areas for cost savings and allows you to develop long-term goals

Proponents of short-term programs advocate for a limited-time, “shock therapy” approach because:

  • People are more likely to stick with the tracking for a short period of time, which requires less effort
  • Even a brief period of tracking expenses can shock people into better money behavior
  • Setting up systems like a credit-card alert when you exceed a chosen balance, or consistently paying in cash can make enough of a change in your habits

If shock therapy is more your style, try one of our free LearnVest bootcamps, which will guide you through the financial side of everything from getting married to cleaning out your closet to doing your taxes.

RELATED: You’ll Never Believe What I Spent Yesterday …

Whether you’re in the every-day-without-fail camp (where we usually hang out), or the every-once-in-a-while camp, the bottom line is that tracking your spending, however you choose to do it, can only lead to good things.

  • CrankyFranky

    I did this years ago – carried a pocket spiral notebook and pen – wrote down everything I spent for a year (I know NOBODY else that has done this) – put it into a spreadsheet and detailed it by category so I had a real good idea of where I was wasting money – ended up saving a lot.

    Some time later on leaving a job they sent me to a financial counselor re. my final payout – I showed him a printout of my spreadsheet – he was like wow – in 20 years I’ve never seen such a thing – can I take a copy ?!

    If/when I finally get a smartphone I’d like to imagine there’s an app that will easily track all expenses down to scanning receipts – but am not aware of such yet – anyone ?