Determining how much money you spend, or want to spend, in each area of your budget is the major step towards getting your budget up and running. Once you do that, effectively keeping track of all the money your family spends on a daily basis becomes the next step. This can seem a daunting task, and at times I have asked myself if it's worth it. Well, it is. And the longer you do it, the more this becomes obvious, as when you see that over a two month period, you have already spent a third of the money marked for your annual pet expenses. It is how you can evaluate and adjust your budget if needed. Here are some suggestions that could help you keep your budget accurately.
First, try to get in the habit of getting a receipt for every single purchase you make, no matter how small or unimportant it seems. Keep all of these receipts in one place and go through them every few days or so to list the expenditures in your budget book, or other budget record. This way, you don't have to try to remember where you spent money, or how much you spent, each time you sit down to fill out your budget book. This could simplify the task of keeping track of expenditures made by more than one person in your family. It may also help you aviod falling into the "miscellaneous" trap, where you just lump all of the money into that column without being specific about where the money went. I am still guily of that sometimes.
Another tip is to go through your checkbook record daily, or every few days if you don't write many checks, and list these expenditures in your budget book. Be sure not to write any ATM withdrawals in your budget record, as they will be recorded as you spend the money on individual purchases and place the receipts in the receipt pile previously mentioned. How you handle credit card payments is a little trickier. I just put the entire amount of the payment in the credit card column I made in my budget book. This may not be the best way to keep track of where we spend money using the credit card, but my short term goal is to have no credit card payments, which will make this less of an issue in my case.
As part of my on-going effort to simplify my budgeting process, I plan on using budgeting software next year. This may not simplify the task of actually keeping track of where the money goes and recording it, but it will be more fun for me! And all my rows and columns will add up nicely without any headache on my part.
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