Tracking Your Personal Spending

Increasingly, our checking accounts get to single digits and we’re left wondering “where did it all go?”  What exactly are we spending money on? Get Rich Slowly has an excellent and thorough post on the spending habits of the Average American. Some insights:

Average food spending was $6133, of which $3465 was spent on meals at home. Based on this data, one can conclude that the average consumer unit spends roughly $300 per month on meals prepared at home and roughly $225 per month on meals away from home.

Average spending for housing was $16,920 for the year, which was way up from the $15,167 average for 2005. That’s an 11.6% increase in housing costs over just two years! Can you say “housing bubble”?

I was surprised by the transportation costs. The average consumer unit spent $8758 on transportation, or about $725 per month. Holy cats! That’s insane. The average household could save big bucks quickly by optimizing their transportation costs.

Unless and until you know where every dollar goes are you able to develop a realistic budget.  Once you’ve made the conscious decision to create a budget and better track your spending, finding the right tools are important. And it doesn’t quite make sense to go out and buy the latest personal finance software. Seems to defeat the purpose.  The Internet has more than you could ask for (or need) by way of FREE resources. Obviously, just because its free doesn’t mean its useful. Kiplinger recently highlighted three FREE and useful financial planning tools:

Online financial-planning tools are getting more personal. Plenty of Web sites crank out cookie-cutter plans, but three recent entrants give users more detailed advice. Voyant, SimpliFi and ESPlannerBasic provide something more than a quick-and-dirty look at your financial state of affairs — for free.

Get Rich Slowly also highlights a number of templates offered by Google Docs for those not looking for step by step annoying guidance from a number of full-service financial planning tools:

…not everyone wants to use a specialized computer program to track their spending. Many Get Rich Slowly readers (including my wife) are content to manage their money with a spreadsheet. Spreadsheets are easily customizable, and if you know what you’re doing, they can actually be a lot more powerful than standard personal-finance software.

You spreadsheet wizards may want to check out personal finance templates from Google Docs. These documents are part of Google’s template gallery, and are freely available for personal use. Don’t like Google Docs? It’s easy enough to export these files in XLS format so that you can use them with a desktop spreadsheet program.

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