New Year Challenge: Track All Spending for a Year

The time has come for me to throw down the gauntlet and issue a challenge to myself. Don’t call it a resolution – the timing as it relates to the new year is merely a coincidence, as I’ve been thinking about this for many months now. Still, the timing is impeccable as a year is an easy-to-measure chunk, so if you insist on calling it a resolution, I can live with that.

gauntlet thrown down

Gravity has taken its toll on this gauntlet.

Here it is: For the next year, I will keep track of all expenses so that I can see exactly how much I spend in a typical year. As an addition, I plan to do it all manually. Tools like Mint and Yodlee can tally up spending reports for any time-period that you wish, and useful as those are, they’re not good enough for my New Year resolution challenge.

You see, I know something about myself, and I suspect it’s true for you as well. I know that if I have to muster the time and energy to write down every expense, it will make me think twice before I swipe my card. Do I really need that cup of coffee from the campus coffee shop during my lunch break today, or can I placate myself with a long pull from the water fountain? Do I really need that second case of beer from Costco, or can I ration myself more sparingly?

Why am I doing this? My purpose is not simply to cut back on my spending, though I suspect that will be an ancillary benefit. When I conceived this idea, I did not intend for it to alter my spending in the least. Instead, I’m taking a larger viewpoint: Since I am planning for an early retirement in the distant future, I need a solidified baseline for my spending in any given year. I already have a budget and I have planned my income streams, but the last thing I want is to quit my job and realize with a sense of sinking despair that I am consistently spending more than my modest sources of income allow, thereby sacrificing my early retirement.

broken golden egg

Your retirement if planned poorly.

By tracking all spending this next year, I can get a solid baseline on just how much income is necessary to meet my family’s expenses in an average year, plus a little extra for a safety net (or for reinvestment). Yodlee tells me that in 2012, we spent almost exactly $40,000, but that includes housing (two mortgages). One of my thresholds for financial independence is that the houses are paid off, so tracking housing income is not the important part. Instead, we need to track how much we spend on all our non-housing needs, and since the vast majority of this goes onto credit cards, it should be easy to track. My goal is to see no more than $20,000 in non-mortgage expenses in 2013. I’ll see how successful we are in meeting that goal next December.

But how to track it? My plan is to use a trusty spreadsheet. and since so many other people have already done the grunt work of setting up budgeting spreadsheets, I don’t need to take the time and energy to create one from scratch. I looked for a while at these two, both of which are available for free:

  1. Simple Budget Tracker - by Ann, Edward, & Frank Robinson – This is a simple one-page spreadsheet that allows you to add entries line by line that track categories that you specify. As a side note, it imports pretty well into Google Drive.
  2. Best Personal Budget Planner (Google Drive version) – This spreadsheet offers multiple pages to track a monthly budget and to see monthly comparisons and track yearly totals. Includes graphs!

The InterestingMoney Expense Tracking Spreadsheet

However, I finally decided to modify and customize my own based on an excellent existing spreadsheet by Neil Rothman. Here it is, available for free on Google Drive:

Google Drive Spreadsheet: Expense Tracker – InterestingMoney.com

Using this spreadsheet, you can use the sheets at the bottom to first set your Fixed and Variable Expenses, then track your daily expenses using the sheets for each month. The daily tracking by category is what interests me most, but I do tend to be a bit obsessive-compulsive about this stuff. :-)

If you have a Google account, then feel free to use the above spreadsheet. If you don’t want to bother with manual tracking, something like Mint or Yodlee is all you need. Since I’m a bit of a masochist, I’m going to track everything manually, probably logging in to all my credit card/checking accounts once every week or so to jot it all down.

Most people wimp out on resolutions for the New Year by the second month. Not this one. This isn’t a New Year’s resolution – it’s a New Year’s declamation!

Spending challenge accepted

Who’s with me? If you want to join me in throwing down the gauntlet, then let’s do this! Bonus points for those of you who opt to manually track your transactions as well. If you know of another spreadsheet or (free) online service to track these expenses, let us all know in the comments.

 

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2 thoughts on “New Year Challenge: Track All Spending for a Year

  1. I think this is a great idea. We have been down this road and our results were actually quite terrifying. Tracking our spending is what catapulted us into our own debt free journey and is quite possibly one of the best things we ever did for ourselves.

    • Thanks, Holly. I know that it’s the kick in the pants I need to stay accountable. I’ve already noticed that my wife and I have already reduced our spending simply because we have to write it down manually.

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