Tips to Start a Money Diary to Take Hold of Your Finances

As the cost of living has bitten, people have developed money-saving habits to ward off problem debt. The data collected from debit and credit card transactions reveal that people have cut back on non-essential expenses like dining out and clothes.

Money management is a must, especially when the cost of living is continually soaring. “The diary could help manage your spending, give you a sense of financial freedom, and on top of that, you stay in control of your finances,” say financial experts. Here are some of the tips to start making money diary:

Jot your expenses down

First and foremost, you should write down your expenses. You can write them on either a piece of paper or your smartphone app. Well, it may sound very traditional and, to some of you, boring as well to get a piece of paper and pen to note down your expenses, but that does not matter.

Whichever method you choose to note down your expenses, make sure that it is easy to use. The more conveniently you make a diary, the more you will look forward to it. “For some people, it is easy to write down spending on a piece of paper, while others may find it more convenient to note down everything on notes in their smartphones,” say an expert, “so instead of copying other ways, you should ask yourself what is convenient for you.”

Schedule the record

 Keeping tabs on your spending is vital to take stock of your financial condition.

Like brushing your teeth, make it your routine. You will be less likely to forget to record your expenses. If you use an app, you can jot down simultaneously. For instance, if you have bought a bar of chocolate on the way to your office, you can note it immediately on your mobile phone.

This is considered the best way to note down all of your expenses, as you are not likely to miss any of them. You will get a true picture of your spending. If you have maintained a small diary for it, you can keep it in your breast pocket or the rear pocket of your trousers or jeans.

If it is not possible, make sure you remember the expenses you made throughout the day and record all of them in your paper diary.

Set small and realistic goals

You will have to set goals to be inspired to make a money diary. Set small weekly goals, so you do not feel overwhelmed.

Make sure those goals are realistic. For instance, you can decide not to spend on coffee the whole week. If you have smaller goals, you will be able to accomplish them sooner. The actual purpose of maintaining a money diary is to boost your savings. In fact, this will lower the frequency of taking out loans for bad credit.

You cannot just sit back after setting your goals, especially if they take some time to accomplish. You need to reflect on how you are going closer to the accomplishment of your goals.

A weekly budget is a must

Just noting down your expenses in a diary is not enough. It will take you nowhere if you do not look over your spending behaviour and change it if necessary. You should record all types of expenses, from groceries to bills, so you know how much money you are left with to spend.

This becomes important when you come across an emergency. Although you can take out a loan to fund your unforeseen expenses, you should be able to meet them from your savings.

Research carefully before you borrow money because interest rates vary by lenders. A few private money lenders in Cork can loan you at the most competitive interest rates. Budgeting will keep you from overspending and borrowing money for recurring expenses every now and then.

If you do not know how to make a budget, you can get loads of suggestions online. The internet is flooded with myriad articles on budgeting and related templates.

Here is a template of the weekly money diary:

Date	Items	Money spent	Reasons	Feelings	Notes
3.3	jacket	€150	Essential/out of boredom	Satisfied/ guilt	I will avoid spending money out of boredom.

Keep tabs on your expenses

At the end of every day, you should match your every penny with receipts and accounts. The next step is to categorise your expenses into needs and wants. Spending money on your wants is not bad, but it should affect your finances for essential and emergency expenses.

Excessive spending on frivolous purchases can impair your budget. You may wind up in debt if you do not change your habit. Record the reason and the feeling, whether it made you happy or disappointed.

Make notes on what you will do and what you will not do to have better control of your finances.

The final comment

Your money diary is a place to find inspiration to be in control of your finances. Just do what your gut feeling says. Money does not have to be boring.

With a money diary, you will be able to get insight into your spending. This will help you cut back on non-essential expenses. Set small, realistic goals to keep yourself motivated to finish what you have started.

The best part about a money diary is that you will be able to manage your money independently, even in difficult times.