Why I Don’t Track Spending

If you’ve been around the blogosphere for a while you’ll definitely notice that there are some PF bloggers who monitor every dollar spent. They give you weekly posts of all their money in and money out. They’ll give monthly summaries of where their money went. If you’ve been hanging around this blog long enough you’ll see that I don’t do that (anymore).

When I first started blogging I tracked spending religiously. I kept track of every dollar. I used Quicken to gauge where I was spending money. I made post after post of where my money was going so I could learn where I was overspending. And it helped! I learned that I lose the majority of my money to eating out. So in 2010 I gave myself a challenge to stop eating out in an effort to control that spending. Since that challenge began I haven’t needed to track my spending, since I don’t overspend on eating out anymore.

I have two checking accounts and two savings accounts.

Checking account #1 (through Bofa) pays for all of my bills. I deposit in it the money I need to spend that month in bills. I don’t use it for anything else other than bill pay. Period.

Checking account #2 (through ING) pays for spending. Food. Clothes. Toilettries. Gifts. Pet supplies. Everything that isn’t a bill gets paid for by my ING account. Why ING? First, there is no overdraft fees. Second, I don’t have a line of credit with ING, so if I go below $0 in this checking account it cuts me off. No more spending. Third, I love ING. If I could marry a bank I’d marry ING.

Savings account #1 (through ING) is for my Emergency Fund. I use ING so I can quickly transfer money out of this account to my spending account if I need to and can roll over unused money from my ING checking if I have extra at the end of a pay period.

Savings account #2 (through ING) is for my yearly savings. I deposit money in this account every month to pay for known once or twice a year occurrences. I transfer the money to the ING checking from the yearly savings account to pay for them.

So why don’t I track my spending?

Because as long as I come out EVEN in my spending account (or ahead) I don’t care where that money has gone.

Tracking my spending becomes a hassle for me. So I simply budget $555/month for EVERYTHING that I could possibly spend money on and that’s all I get. Since I get paid bi-monthly I end up with $277 twice a month. If I run out with a few days to go it isn’t the end of the world, more money is coming soon (but this rarely happens, if ever).

Perhaps this isn’t the best thing to do. Perhaps it isn’t even recommended. But I tracked my spending for over a year to figure out where it was all going. And now that I know I’m comfortable just giving myself money and trusting myself to do what is needed. I know that I should be aiming to spend around $10/day on food. I know I should be aiming to buy gas only twice a month. When I go over I know I have to cut back in other areas and I monitor my balance every other day to make sure I’m staying on track with where I should be.

It gives me a lot of flexibility to not keep track of every penny. And in some ways a lot of security to know that I don’t HAVE to track every dollar. I can’t overspend. I know (now) what I’m aiming for in each category.

Do you track your spending? Are you someone who has to double check every dollar? Or are you comfortable just knowing that as long as you don’t go over budget you’re fine?


20 Responses to Why I Don’t Track Spending

  1. Miss T says:

    Interesting take. We track our spending through Quicken just like you used to. I think as much as we log our spending in it, we have allowed ourselves to flex a lot more now that we can trust ourselves with our money.I think Quicken just helps us see where we can flex as well as set goals. For example, we are planning a big trip this year to Asia. With Quicken we can see where we can pull money out from other parts of our budget.

    My husband and I each have a chequing account which we use collectively to pay bills. In some ways it is like your two accounts…one goes to the mortgage, house insurance, etc. and the other goes to household supplies and food. It really works well to split it up doesn’t it?!

  2. Daisy says:

    I think everyone should go through a period in thier life, however short, to track their spending, because it makes you aware of where your money is going. Which is extremely valuable. I don’t think it’s a bad thing that you don’t track your spending now, because you once did, and you are aware & able to make better decisions.
    I am just months into being interested in paying off debt, so I track every penny. I care where every single dime goes. I hope to not have to care, one day, but so far, it’s how it’s gotta be 😦
    I think you’ve got the right attitude, though!

  3. Kim says:

    I don’t track where every dollar goes, but the general trend in my spending. I do this for similar reasons as you:

    1) I already know the general trends in my spending, and where I need to watch out (shopping, eating out).

    2) I want a financial management plan that will work FOR ME. While I admire some blogger’s tenacity in tracking every penny spent, I know that after a while I’d just get overwhelmed.

    3) I have an alternative that works. I transfer the obligation funds (debt repayment, efund) from my biweekly pay as soon as I get paid. Then, I allow myself a reasonable amount of “play money” that I can spend on “general living”, and it works, I rarely go over!

  4. Psychsarah says:

    I don’t track every penny either. Sometimes I feel like I should, as so many blogs espouse the benefits. When I’ve tried, it drove me (and DH) insane. (we have our $ all together, so I see little point in tracking mine if he doesn’t too). Really, now that we have things under control (as in everything gets paid, debt is under control etc.) I try not to sweat it too much. Money “disappears” each month into retirement and emergency savings accounts, into a different checking account for bills, and the rest is our groceries and fun money. So long as this account stays in the black, I figure we’re fine.

  5. I track everything. But that’s because I’m obsessive compulsive & completely anal about stuff. (Yes, I admit that I am.)

    That being said, I don’t budget like most people. I don’t say here’s $50 for this and $25 for that. I say “here’s $200 for the month, spend on whatever I want, but make sure that when the receipts come back, I have to reconcile.”

    The reconiliation is less for budgeting reasons and more as an FYI. Cause it’s somewhat ridiculous if I end up spending 75% of my discretionary spending on just snacks and take-out food. So it’s more for me to be aware of my spending habits.

  6. I have to track my spending because I just started to about 3 months ago. If I don’t track it for a week, I go off track. I’m still trying to figure out how much to give myself each month. My savings goals are also all over the place. Hopefully after a year of tracking my spending I can give myself a better idea of how much to spend each month like you. I think it’s okay for people to not track anything… I wish I could go back to not tracking my spending but it sort of gives me a slap in the face back to reality when I post my weekly spending recaps on my blog and see that all my little purchases added up to $400 O.o

  7. Ashley says:

    I don’t track my spending and I didn’t when I was getting out of debt either. I know some people, who aren’t even working on getting out of debt, who track everything in an excel spreadsheet and I just can’t even imagine. That sounds tedious and unnecessary to me. It’s enough for me to just have an idea in my head of what I’m spending and to keep track of what areas I’m spending in by using the budgets on Mint. This was pretty easy when I was getting out of debt, because I was barely spending anything, so it might take some adjustment now that I am spending more.

  8. Red says:

    I definitely track my spending down to the penny. I tracked it at the beginning of 2010 but got off track with the wedding, so 2011 will be the first year I’ve tracked everything.

    If you can trust yourself with your spending, there’s not much need to track. I like the accountability I feel when posting my spending reports. I’m not sure how long it will take for me to trust myself with my spending. It’s kind of like credit cards. Some bloggers encourage rewards cards, and they do have awesome benefits. But I was so irresponsible with credit cards the first time around that I don’t know if I’ll ever feel comfortable getting one again.

  9. I’ve tracked my spending for about six years, and I’ll continue to do it for the indefinite future. It’s such an invaluable tool for me, and it doesn’t take much time. My husband created an amazing spreadsheet that acts as an account register, spending tracker, and net worth tally, and we balance it together about once a week.

  10. I track our spending on a monthly basis – because we use a joint credit card for all purchases, I just go through the statement once a month to see where the money went. That seems to be working pretty well for us.

    i’m so impressed that you did a post for a Saturday morning

  11. I track spending to the penny, but I have never posted it, because I find it pretty boring to look at other peoples’ spending reports unless they are in the context of something else. Blog posts on “I tracked spending this month and discovered something” are interesting; blog posts on “I spent x $ on y stuff” are dull.

  12. Airam says:

    2010 was the first year I tracked my spending and it’s because I wanted (and needed) to see where my money was going. As much as I valued the experience I’ll fully admit that I’m not a big fan of it so I’ll most likely be trying a different method every month this year until I can find one that I can sustain on the long run.

  13. I’m in the same boat, except I have very broad ‘buckets’. One of them is just ‘life’… which is whatever money I have left after paying, I spend as I want.

  14. jpkittie says:

    I think it is fantastic! You have to do what works for you! I am just getting back into ‘where the money goes’ so I am tracking & in hopes that halfway though the year, I can just go off of my envelopes & not really pay a huge amount of attention to it 🙂

  15. I love tracking my spending because it helps me guage what areas I’m spending too much in. I don’t go crazy with the spending, so I usually have money left over at the end of the month, but I think I wouldn’t do so well if I didn’t have a clear sense of where it was going on a day to day basis.

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  17. Clare says:

    I really admire this post because eating at restaurants is definitely the only culprit behind why I don’t have thousands more saved. It’s a luxury/indulgence I really need to get a grip on. Besides my restaurant habit, I don’t overspend anywhere else. I don’t shop, I have no credit card debt, etcetera. I admire your method!

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  19. Jerry says:

    Tracking spending drives me to drink, as well. While others say it’s insurance for overspending, I find it just frustrates me. I’m always able to save every month and I try to be as frugal as possible. It’s not “perfect” but it does lead us to live within and well below our means.

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