Friday, October 06, 2006
September 16, 2006
It’s Saturday today. The kids were busy with their Art Class and Guitar Lessons with Teacher Mond this morning. David was out so I had the time to do some organizing that I wasn’t able to do during the week. First, I fixed David’s desk and then, I logged three months worth of accumulated receipts and tried to reconstruct undocumented expenses based on memory, into my computer. What a feat.
About logging expenses: Why do I ever have to do this? Ever since I started earning my own money, I would jot down my expenses on tiny notebooks. I thought that by keeping track of my spending, I would know where my money was going, if I was overspending, or if I had money left over to give myself a treat. But in reality, it wasn’t really helping me save or spend my money wisely. The most it did for me was to keep a diary of the prices of things that I bought months before and know when I bought a specific item.
As a wife and mother, I entered the family’s expenses into an Excel file in my computer. I divided my file into months and put these expenses under different categories e.g. education, dining, groceries, salaries, taxes, sports, transportation, utilities, etc. At the end of the year, I would convert the numbers into charts and show my husband a picture of where his hard-earned money went. Like, 32% went to education, 13% to groceries, 4% to gasoline, etc. But did that really matter? Okay, so he saw the beautiful and colorful charts as a summary of how we spent our money. But did it help us save or spend our money wisely? The only benefit to me was that when my husband asked me questions such as, “How much did we buy our refrigerator?” or “When did we buy our television set?” I could give him an answer with the click of a mouse.
I remember asking my grandmother how she did the budget for her household. She told me that Lolo was employed and received a paycheck regularly. He would give a certain amount to my lola, in cash. Lola had little envelopes for certain categories. For example, she had an envelope for groceries and market, another one for gasoline, for salaries, for utilities, etc. She would place the budgeted amount into each envelope. Therefore, it was unlikely for her to overspend. My guess is that she did a little switching once in a while, but, yes, she probably didn’t overspend.
I know so many people who also log their expenses, a few who still use the envelope approach, and a couple who use vouchers and petty cash slips for the checks and money that goes out of their pockets. I’ve asked a couple of them why they do it and if this exercise helps them in any other way aside from keeping a historical record. None of them have given me an answer that gives me the confidence to pursue this routinary, time consuming task.
If anyone out there can tell me, please do, before I finally let go of this practice.
It’s Saturday today. The kids were busy with their Art Class and Guitar Lessons with Teacher Mond this morning. David was out so I had the time to do some organizing that I wasn’t able to do during the week. First, I fixed David’s desk and then, I logged three months worth of accumulated receipts and tried to reconstruct undocumented expenses based on memory, into my computer. What a feat.
About logging expenses: Why do I ever have to do this? Ever since I started earning my own money, I would jot down my expenses on tiny notebooks. I thought that by keeping track of my spending, I would know where my money was going, if I was overspending, or if I had money left over to give myself a treat. But in reality, it wasn’t really helping me save or spend my money wisely. The most it did for me was to keep a diary of the prices of things that I bought months before and know when I bought a specific item.
As a wife and mother, I entered the family’s expenses into an Excel file in my computer. I divided my file into months and put these expenses under different categories e.g. education, dining, groceries, salaries, taxes, sports, transportation, utilities, etc. At the end of the year, I would convert the numbers into charts and show my husband a picture of where his hard-earned money went. Like, 32% went to education, 13% to groceries, 4% to gasoline, etc. But did that really matter? Okay, so he saw the beautiful and colorful charts as a summary of how we spent our money. But did it help us save or spend our money wisely? The only benefit to me was that when my husband asked me questions such as, “How much did we buy our refrigerator?” or “When did we buy our television set?” I could give him an answer with the click of a mouse.
I remember asking my grandmother how she did the budget for her household. She told me that Lolo was employed and received a paycheck regularly. He would give a certain amount to my lola, in cash. Lola had little envelopes for certain categories. For example, she had an envelope for groceries and market, another one for gasoline, for salaries, for utilities, etc. She would place the budgeted amount into each envelope. Therefore, it was unlikely for her to overspend. My guess is that she did a little switching once in a while, but, yes, she probably didn’t overspend.
I know so many people who also log their expenses, a few who still use the envelope approach, and a couple who use vouchers and petty cash slips for the checks and money that goes out of their pockets. I’ve asked a couple of them why they do it and if this exercise helps them in any other way aside from keeping a historical record. None of them have given me an answer that gives me the confidence to pursue this routinary, time consuming task.
If anyone out there can tell me, please do, before I finally let go of this practice.
# posted by Keep It Together @ 5:59 AM 
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It helped my husband and I to meet yearly financial goals. More importantly, it got us to communicate more about money management, which is something we hardly ever did. The key is to log it in Excel weekly or more often so that it doesn't pile up, and to do a monthly review together based on the figures.
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