Keeping A Daily Spending Diary And Small Business Record Keeping

Have you ever taken $20 out of an ATM and wondered later where it went? Start keeping a daily spending diary to keep track of where your money goes. Try it out for one week and you’ll be amazed at how much you can spend on the little things like coffee, eating out and entertainment. Here’s how to do it:

Take a blank piece of paper and create a column for each day of the week, Monday through Friday.

Put the piece of paper in your wallet or purse somewhere where you can have it with you at all times.

Make a note of every single penny that you spend This is very important, if you forget to write down a coffee here and a soda there, you won’t have a complete picture of how you’re spending your money by the end of the week.

At the end of the week quickly order the items that you spent money on throughout the week into the following categories: Food, transportation, entertainment, clothing, housing and other. Next add up your expenses in each category. Here’s an example of one day:


Coffee – $2.75 Food: $10.60

Bus fare – $3.00 Transportation: $3.00

Lunch $7.85 Entertainment: $2.50

Magazine – $2.50 TOTAL: $16.10

Next, find out what percentage of your money you spend on each category by dividing the total for each category by the overall total. Following the example above, I spent 66% on food ($10.60/$16.10).

Once you have completed your calculations look carefully through your analysis. Does anything surprise you? Are you spending more money than you thought on small items? Small things, like coffee, drinks, cigarettes etc… can really add up in a week! Just think, if you spend $3 on coffee every day, that’s $21 a week or $1,092 a year! Identify these areas that surprise you and look for opportunities to cut back on your spending.

Keeping a daily spending diary is an easy way to take control over your spending and to identify some less than desirable spending habits. Also as an added bonus, by keeping a daily spending diary, you’re already halfway there in creating your own personal budget. Next week we’ll explain how to set up your budget. In the meantime, congratulations on taking an important first step! You’re on your way to learning more about Your Money and You.

TIP: Use your daily spending diary as a savings tool. After one week you should be able to easily identify some areas to cut back on your spending. The money you save will bring you one step closer to your goals of opening a business, saving for your children’s education, purchasing a home or taking a dream vacation.

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