A money diary is a record of your everyday expenditures and decisions. Money diaries document your financial habits and the subtleties of daily life (both good and bad!).
But how does it feel to keep a money diary? Is it an excellent personal financial exercise or another opportunity for bloggers to overshare their personal lives with the world? Here’s how to create one, why you should maintain one for a week, and how it might speed up the process of reaching your financial goals.
Here are five explanations for why you ought to start a money journal right away:
1. Learn to budget
You’ll be able to create an adequate budget for yourself by examining how much money you have coming in each month and where it goes. Compare your initial budget to what transpired with your cash after the month. Find strategies to alter your budget if you overspent (or underspent) in particular categories.
2. Spend less money
One of the initial advantages is that you will spend less money. After approximately a week of maintaining a spending journal, this automatically occurs.
When you start tracking your spending, you discover how much you spend and naturally begin to spend less. Once you start spending less, you may save more to pay off any obligations, such as credit card debt, a house mortgage, or a vehicle loan.
3. Reduce spending following high-spend months
Each month, you may view your overall spending. It’s simple to observe if your spending has suddenly increased, so you may pledge to cut back a little the following month.
4. Aids in the organization of home administration
Is it time to service the boiler? When was the last time the chimney cleaner came? Last year, how much did the gas safety certificate cost? How much should I budget for auto service? How much more expensive is this year’s insurance renewal quotation than the previous year’s? A spending diary will help track when and how much money you should spend for less regular jobs and once-a-year costs.
5. Keeping a money diary can help you recognize your victories
How often have you looked back on the previous month and felt uninspired or perhaps forgotten the experiences you shared, created, or learned from? A money journal will allow you to keep track of your everyday activities and enjoy your progress that month and all of your victories along the road.