Basic Frugal Tools—Tracking What You Have

Track Your Money

Why Track?

Tracking your material possessions, and most importantly your cash flow, is one of the basic principles of a frugal life. It is what a scale is to weight loss. How can you know what you are doing if you have no tracking system? Lack of a good tracking system is what causes fees such as overdrafts to accrue. If you don’t know what is really in your account this is not surprising. It is also what causes shortfalls in the face of normal expenses.

Why Doesn’t Everyone Do This?

The main reason people fail to track their cash flow is the tediousness of the process, and the rush of life in the modern world. There is no tracking system that doesn’t require a little extra effort every time you take in money in any form, and every time you spend money in any form. It also requires saving receipts.

How to Track

That being said, there are many ways to track your cash. If you are faithful in your record-keeping and the method suits the complexity of your life, it doesn’t matter which you use. If you have a simple situation you can use a little notebook that you carry with you everywhere. If you spend, you write it down. If you get paid, you write it down. For a simple all cash system, this will work.

Next in complexity is using a bank debit card and cash. I favor this method because under the new rules debit card can’t be overdrawn, and they don’t bounce. Keep a sharp eye on the online bank statement, which should reflect your cash flow accurately. And use the notebook for tracking cash. Why? Because little cash expenditures can create a real leak over time.

For the more complex set-up or the more technically savvy amongst us, the Quick Books program provides a great tracking system. If you are running one or more businesses, this is for you. Just set up another company called Me Inc. or something like that. Take a few moments each day to input the day’s transactions.  You must still write down cash transactions as they occur, or get a receipt for each one.  That is the only way to handle cash.

Cash Flow Management

Tracking is just the first step. Planning for upcoming expenses takes further effort. But tracking is an essential first step. Even if your flow is so small right now you could do it in your head, writing it down is a good habit to develop. And if the shortfalls are caused by lack of income, rather than lack of tracking and planning, at least you will know exactly what you need to make it through.

Here is a  helpful link:

http://quickbooks.intuit.com/  Quickbooks

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2 Responses

  1. I have a simple method that I devised many years ago. I keep a notebook, I save my receipts, I have an easy filing system that works for me, and I monitor my banking online virtually every day. I project two or three months ahead, which keeps me on track. I also rely heavily on my two calculators, since my math skills are not quite my best feature! 😀

  2. I’ve been using a simple Excel table to track my income and expenses for over a year now. Definitely continuing to do that – not only does it let me know how much money I have left, but I can also go back to compare prices to decide where best to shop when money is tight.

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