A spending journal sounds boring. It may seem like you are condemning yourself to a lifetime of constant record keeping. In reality, it is a way to bring order from chaos in your spending habits. Good reasons are easy to discover for why this discipline is needed and will pay you dividends.
It gives you a completely accurate trail of where your money has gone.
The spending journal answers the age old question: “Where did all my money go?” You have a record of where it went day by day and purchase by purchase. It can be alarming when you first start keeping a spending journal to see how much money leaves so quickly.
A spending journal causes you to stop and think before you spend money.
This record is a form a personal accountability. It becomes a way to feel the impact of your expenditures. As the journal builds, you will find yourself thinking about what this purchase will look like in the journal a week or two from now. Looking back in the journal, you will see spending that was not necessary. It will have an impact when you realize past spending is keeping you from being able to afford things you need today.
Tracking your spending can highlight overspending.
If you use your journal, spending patterns will emerge. When you add up all of those cups of specialty coffee for a month, you may discover a way to afford a new car. It will not take long for these patterns to influence your buying habits. When those cups of coffee show up as a $200 per month habit, you will find it much easier to downshift to a more generic cup of morning caffeine.
This journal can help you see changes in your spending habits.
Changes in spending patterns can be both good and bad. You may start to see real progress in making less impulsive purchases. Or, you could find that you traded one bad spending habit for a different bad spending habit. Either way, a journal can help you be a more thoughtful spender.
It is hard to fix something if you cannot find where it is broken.
For those who are always scrapping for nickels in the couch cushions, this will be a great blessing. A spending journal will assist you in your efforts to find more available cash. As you identify poor spending habits and repair them, your cash flow issues will greatly improve. It cannot give you more income, but the journal can help you make serious adjustments to your outgoing money. You should also be able to develop the ability to say no to your bad spending decisions.