Over the years, I've tried several money tracking programs but have never been able to stick with one. I have a general idea of where my money goes monthly but couldn't tell you down to the last penny or even many dollars. It's one of those things that I've always felt kind of guilty about. I've always believed that financially responsible people budget their money. It's one those things that you "should" do, like praying or reading your Bible daily (also not axiomatic mandates by the way).
Then the skies parted.
I recently started reading Personal Finances for Dummies, after seeing a recommendation of it in another book.
It's one of the best books I've ever read, on any topic. Seriously.
In the book, the author talks about analyzing your spending. He says mentions that it's beneficial to analyze your spending in 3 circumstances;
- If you aren't saving enough to meet your financial goals.
- If you think your spending is out of control or you don't really know where your money goes.
- You're anticipating a significant life change (like a marriage, becoming self employed, having kids, retiring, etc...)
But he points out, if you're already a saver, then there's really no need to anally track every dollar. If you already have good savings habits, then there's no real value in tracking your spending. The good habit is saving, not tracking the money. He points out that for some people, tracking where their money is going is a kind of compulsion.
This was such a liberating idea for me and runs counter to literally everything I've ever heard about personal finances.
The book strongly advocates understanding your relationship with money and living within your means as well as being satisfied with what you have, not what you want.
If you want to know more about investing or money management then this is the book for you, irrespective of age or income.