It’s January — Where Did All the Money Go?

Over the last two months, I played fast and loose with the cash — the perfect gift for someone on my list — charge it! Dinner out with friends — count me in! It was as though I wondered if I’d ever be invited out again. Now I fear the next credit card statement.

So now it’s time to cleanse — pull back a little and get a handle on finances again. The best way I’ve ever found to do this is to document every expense throughout the day. It really takes very little time (moments after each transaction) and can be a real eye-opener. If nothing else, I think twice before I write down my 4th indulgence of the day or before I charge another pair of black shoes.

I started doing this off and on (more off than on) when I was 22 and it changed my life, really. I was recently out of college working my first job and some friends wanted to go in on a ski house together. I thought there’s no way that’s in the budget (I wanted to start paying off loans — and moving out of my parents’ house) but when I started keeping closer track, I realized I could cut here and there to have enough. It wasn’t the fanciest house and I didn’t have the hippest skis and gear, but it was one of the most memorable times of my life. Plus, it was rewarding to be consciously investing in something. I remember the winter with the house far more than I miss the dinners out or new Ann Taylor dress that I had to cut out of the budget.

So I’m getting back to it. Usually, I set a daily goal amount for myself, exclusive of non-negotiables like groceries, mortgage, car payments, etc. Instead, I log things like clothes, dinners, books, etc. — the like-to’s rather than the have-to’s. I’ve always done it in a little notebook in my purse but there are a lot of electronic options, too, that I looked into today…

TEN MINUTE TEST: I figured it’s time to finally learn about iPhone apps — don’t I deserve one app for every 20 my kids have downloaded? So this is what I did in 10 minutes… First, I found the App Store on my iPhone (yes, I’m a virgin app downloader). Then I searched on “expense” and found a handful to expense reporting apps. Within 10 minutes, I’d found one that looks like it will work well. Now, if only I knew the password I could download it now — if only I could call those kids at school! If you have a BlackBerry, there are 38 apps for expense tracking.

For someone who sometimes doesn’t even look at the receipt, logging expenses helps me appreciate where my money’s going… Last week we went out for hot chocolate for four for $14! That’s a treat I want to savor…