Two posts ago, I wrote about the importance of 'cultivating your money consciousness'. In that post, I explained that cultivating one's money consciousness means thinking more positively about your financial predicament, despite the current reality. It also means being aware of where your ideas about money come from and where your actual physical cash is going. There are many software programs out there like Quicken that help track your spending and the performance of your investments. But just like a good old-fashioned diary or journal - for all of you men out there - can help you emotionally, a cash diary can help you financially.
I keep a cash diary myself. What do I put in it? Well, about once a week, I write down how much I have in my investment accounts, which is essentially my liquid net worth. I also write down how much I expect to be in that investment account, based upon how much I'll take from my next paycheck for investment purposes. This might sound really anal, but seeing how much you've saved - especially when you've amassed a few thousand dollars - motivates you tremendously. I'm not necessarily sure it'll do the same for you, but it just might. And I certainly think it's worth a shot.
Another thing that I write in my financial diary/journal is how much I've spent on my credit card and what amount will be paid off that month, and as of what date. I don't advocate maintaining a balance on your credit card, and I usually don't keep one myself. But if I charge three or four hundred dollars on my card, I'll write down the fact that I expect the balance to be at $100 or $150 by the end of the month.
When keeping a financial journal or cash diary, you don't have to write down every little expense. (Although this might be a useful financial exercise for some.) You should write down major things like the value of your accounts, what major bills you have to pay, what your short-, intermediate-, and long-term financial goals are, and what amount you would like to see in your account. I'm positive that keeping this up for three months will help to focus your finances, and make you feel more in control of your wallet.
Feel free to email me with me any questions or comments. Until next time...