How to Start a Money Diary

The most important thing to remember about keeping a money diary is that you must get into the habit of using it every day. If you don’t, you won’t get a true picture of your spending, and those money leaks will stay hidden. Writing all your spending into your diary every day will bring those leaks to light, so that you can identify and put a stop to them. To get the best results, you should keep the diary going for a minimum of six weeks, but three or four months would be even better. The longer you keep your money diary, the better chance you will have of catching all those expenses, including any quarterly bills you may have forgotten.

Your diary should show the day and date, and have enough space to write, say, a dozen lines underneath. Showing the day of the week is important because in this way you can see at a glance if you tend to spend more money on certain days than others. You may spend more on Saturdays, for example, by going out shopping and then socializing in the evening. When you know this about yourself, you can be prepared and look for ways to reduce your spending on those particular days. If you need some help getting out of a tight financial spot, you can trust this hard money lender Tampa Florida on hard money loans, fix & flip loans, commercial bridge loans, and rental property loans..

When you have set up your diary, take it with you everywhere you go, and write in it absolutely everything you spend. Every time you write a cheque, use a debit or credit card or pay cash for some­thing, even if it’s for only a few pence, write it in the diary. If you are rushed and haven’t got time to write in an entry, add it at the very first opportunity afterwards. For example, if you buy a book and then have to rush to catch a train, keep the receipt, and write the amount into your diary as soon as you have settled into your seat on the train.

Your entries do not have to be long; in fact, keeping them short will be less of a chore and will encourage you to keep the diary going. Simply write a brief description of the item and how much it cost. Remember, however, that you do need to list every item separately. For example, if you have just bought some breakfast for yourself on the way to work, write it down as follows:

• Toast £1.00
• Coffee £1.50

Don’t be tempted to summarise by writing ‘Breakfast £2.50’. Likewise, if you have just bought some cosmetics, don’t write ‘Cosmetics £17.00’. Separating things out in this way is essential if you are going to be able to look back through your diary and pinpoint exactly what you’re spending your money on.

You should also include any unexpected bills. For example, if you have just had to spend £35.00 getting a new wing mirror for your car, write it in your diary as soon as you have written out your cheque. The only things you don’t need to include in your money diary are your regular living expenses that get paid by direct debit or standing order and which you’ve already included in your personal chart. For example, if you pay your rent or mortgage by direct debit, then you will already have a note of this and there is no need to write it in your diary. But if you pay your rent by cheque, I suggest you do include it in your money diary, so that every time you write a cheque it becomes automatic for you to reach for your diary.