As you may have read in some previous posts, I’ve been trying to knuckle down to track all of my spending for at least a month. The reason for this effort? So that I can identify where my money is being spent, and identify where money can be saved.
The tool I’ve been using on and off (and now, thankfully, on again), is Expensr – a free web-based tool which helps you analyse where your money is going, by category and over time.
Of course, if you want something similar which isn’t web based, you could setup an Excel or Open Office spreadsheet on your PC, or invest in a good old pen and pad and record the transactions there. I think the key is to make it as simple as possible to record the transactions as early as possible – so that you don’t forget them. Xpenser is another tool for tracking expenses (and yes, it does have an eerily similar name to Expensr, although it appears to be focused at a slightly different market) and what I like about that is the ability to add transactions by a variety of methods – by text message, email, online, and even via a voice call. The idea is that you can add information even when you’re not in front of your PC – I’m hoping that Expensr adds similar functionality in the future (although they do already have a mobile version of the site).
So once the information is recorded, what should you do with it?
Firstly, identify your “fixed” costs, such as your mortgage or insurances. Are they really fixed? Have you tried getting cheaper deals recently? Be aware of any exit charges or penalties for cancellation when working out whether there are cheaper options available. Then look at your spending in other areas – areas that can easily be varied by making changes to your lifestyle, such as entertainment, eating out and petrol. Our big list of money saving ideas might help give you some more thoughts.
Another useful way to look at your spending is over time, which will help you work out when in the month all your money is disappearing – knowing this might help you plan better, so that there’s more pay packet left at the end of the month.
Once I’ve managed to go for a full month of tracking my spending, I’ll try to post an analysis of where I could be looking to save money.