Keeping Track of Expenditures

When you get serious about creating a budget as a guide to your spending, the first, and perhaps most important step is to create a history of your total expenditures. Without this information, budgeting is impossible. You should keep an accurate record of your daily expenditures for at least one month before you sit down to create a family budget. Why so long? The answer is simple. You need to understand how money flows in and out during the course of at least one month, preferably more, in order to really get a handle on your spending. If you would like a copy of the form I suggest to my clients download it by clicking here Request Expenditure Form. It is important to remember that the longer you keep accurate spending records, the better you will be able to construct your budget or spending plan. By keeping accurate records for 2 to 3 months you smooth out the highs and lows that come from unexpected expenses. Every adult member of your household must participate in the process or it simply will not work. Begin your records on a Sunday and make it a habit to carry the form with you at all times. Record each and every expenditure you make that was paid for by cash or the equivalent of cash. The cash equivalents include checks written, debit card transactions (but not cash withdrawals) or automatic bank withdrawal payments made. Also record deposits made to savings accounts, retirement accounts or purchases of investment instruments like stocks, bonds, mutual funds or options. Do not record credit card charges as they are not cash expenditures until you actually pay the bill when the cash expenditure will be recorded. At the close of each day, total your expenses. At the end of the week enter a weekly total. Gather all the household sheets together and file them away and have each member of the household begin a new sheet. At the end of 8 to 12 weeks you will have a solid record of your spending for a reasonable period of time. The data you collect in this way will help you to get a handle on your expenditures and create a workable family budget plan.