“If you can’t measure it, you can’t improve it.”
This is a popular management quote that is also applicable to budgeting. For personal budgeting I would change it to say, “If you do not track it, you cannot improve it.”
I wanted to use this shopping ban update to talk about the different strategies Kevin and I have used to budget and track expenses.
We are not masters. Our strategies continue to evolve as we learn what motivates us and what holds us accountable.
Sometimes trial and error has been our best teacher.
Since everyone is different, you have to see what works for you. If you have a spouse, you have to see what works for both of you.
There has to be grace when there are slip-ups, but also ownership of mistakes.
Budgeting is always a delicate balance.
So here are a few of the strategies we have tried:
1. Daily Tracking
This was one of our first attempts at accountability in our marriage. We had a whiteboard on our refrigerator, and we simply wrote what we spent each day. We wrote the item and the cost. We would keep 3-4 days up there at a time before erasing it.
This strategy helped us both realize we were a team. We realized some of our daily decisions impacted each other.
This strategy also changed my behavior. I knew I would have to write my purchases down, so this helped me say no to some purchases.
2. Cash Envelopes
We have tried many variations of these.
We started with separate envelopes for gas, groceries, “fun,” gifts, etc. We found separate envelopes was a bit daunting for us, so we went down to two.
Today we have one envelope. It covers groceries, gas, eating out, gifts, activities….everything. This works for us and feels simpler than trying to break things down into so many categories.
3. Want Board/List
This started out as a whiteboard in our first home. We would write down items we thought we wanted and try to leave them on there for 30 days before deciding to purchase.
This strategy works well for me. All that has changed is the list is a word document now that I can update easier and access anywhere.
4. “What is Left”
This tracking strategy is more recent. Kevin and I were trying to figure out how to communicate our cash and account information quickly and daily.
So we starting writing “what was left” on our whiteboard. (We obviously LOVE our whiteboard).
It would look something like an equation:
Example: $60 cash+ $40 in account= $100 available until August 16th
Then we take the total amount left and divide it by the days left: $100/5 days= $20 per day available.
Dividing the number out per day changes our behavior. If you think you have $100 available, you might spend it all on groceries the first day. Instead, if you say, “I have $20 today, $20 tomorrow,” you pace yourself and make better choices.
5. Cash flow calendar
This is our newest strategy. Kevin loves it, and I am trying to love it.
It is a monthly calendar with all our expenses printed on their respective dates. Each day has an estimate of what our bank account amount should be.
This strategy helps you look at your whole month and figure out where things might get tight. Or if you are worried you might be short on a bill, this calendar would show you exactly the date you would be short.
We update it every few day with “actual” numbers and then see how the actual compares with our projections. If there are discrepancies we can discuss what caused them.
I know this is a lot to think about.
The reason I wanted to share these strategies is to show that there is not one right answer.
We use a combination of these strategies in a way that makes sense for us.
The important thing is to do something. Any kind of tracking will help you improve going forward.
It is not always fun to face the numbers or admit mistakes.
Tracking gives you a starting point, reveals behaviors, and holds you accountable. All of these things lead to better financial decisions.
If you have any different strategies than the ones shared, I would love to read them in the comments! I am always excited to try something new.