A Really Cheap Solution to Overspending

How do you stay frugal without being miserly?  I don’t want to feel guilty every time I need to make a purchase.  At the same time, without a budget and limits, my bank account would soon be empty.  My solution to prevent overspending is sitting right next to my wallet.

In my wallet I keep several index cards.  Whenever I buy anything, I write down the date, what I purchased and how much it cost on the card.  It’s not an original idea by any means, but I’ve found it is incredibly useful both for avoiding post-purchase guilt and overspending.

Writing Down Expenses Keeps You Sane

My bank account keeps perfect records of every one of my transactions.  Any purchases with debit, credit or checks will be measured automatically by my bank.  Although there is merit to keeping a second set of records, I don’t bother writing down every purchase just to prevent a typo.

The real reason I started writing down all my expenses is that it makes me aware of how much money I am spending.  It’s easy to forget about expenses until you look at your monthly bank statement.  By forcing yourself to write down any purchases, you are always aware of the outflow from your bank account.

What is Measured, Will Improve

I think a lot of post-purchase uneasiness (for those of us not blessed with a carefree spending philosophy) comes from being unsure whether we are spending too much.  If you have a snapshot of the last several days expenses in your wallet, you have a lot more clarity.  You can avoid unnecessary expenses when your list is getting large and relax a bit if you’re under budget.

Each week, I transfer the items on my index card to a computer document storing my records for the entire month.  Although I don’t look at this list every day, it also helps me get a snapshot of what I have spent money on.

This will give a better picture than bank/credit card statements because you write your own descriptions.  You won’t wonder what a purchase was for, just because you don’t recognize the store name.

If you’re trying to be frugal and work within a budget, I think keeping a set of index cards is a must.  Even if you can’t control some expenses, writing down your purchases puts your finger on the pulse of your financial health.