Should You Keep A Money Diary? Experts Weigh in
I have been attempting to log a money diary with the same verve that I have my many failed journaling attempts, and for about as long. Every so often, I'll make my way into a bookstore, purchase a notebook (the irony!), and begin my tracking with that very same item. This will last for a week, if I'm dedicated, before I enviably forget about a purchase and declare the whole endeavor ruined.
Like journaling, it's something I feel I should do. Isn't this the action of meticulous, responsible, thoughtful people? Surely everyone who seems to have it all together must have a detailed log of their purchases dating back a decade? Turns out, the path to financial self-awareness isn't so simple or straightforward.
"It's not that you should or shouldn't have a money diary: It's how you develop a relationship with your money—and how you become mindful with your spending," says financial therapist Bari Tessler Linden, founder of The Art of Money.
Shift your mindset.
"I'm a big fan of having people notice what is happening with your money. Physically writing down your purchases is creating an awareness that's in the moment," says financial coach Lynne Somerman. "But I don't necessarily need you to do anything with it; you should just know what's happening." She recommends doing this actively for two weeks, and then after, you can ease up on your tracking—but still keep it as a habit.
The key to this, however? "Take the emotion out of it: Don't evaluate your purchases with shame; they are just things. It's not good or bad you bought lunch; it's just a fact that you bought lunch," she says. You're simply training your brain to think about money as a piece of information, so you don't end up avoiding it—only to be surprised later when you look at your bank statement.
Somerman likens it to learning how to meditate: "When you meditate, you are learning to be in the moment. And you know when you have thoughts that pop in and out, and you're taught to acknowledge it, observe it, and let it pass? That's like our purchases: Witness that you bought something and move on; the core of what you are doing is teaching yourself to be present with your money."
Now that you have a habit of tracking your expenses, take it to the next level. Tessler Linden says she recommends using a bookkeeping app—like Mint, QuickBooks, or YNAB—which will be more efficient. "These programs will add things up for you, pull reports, compare this month to other months, show your cash flow, and help with your budgeting," she says.
Her personal system is to add in expenses every few days, check in every week, and then have a "money date" monthly, where she evaluates where she's at financially. "This is a great way to learn about your patterns, where you are spending, and what your values are and should be," she says. "But it's important to be compassionate with yourself when you do this. Don't judge yourself about your spending choices, as everyone's values are going to be different."
Do this process for six months to a year—which will give you enough time to really learn about your money habits. From there, you can decide to keep on tracking, ease up on the regularity, or even outsource the responsibility entirely.
And as for those money dates? If just the thought of that inspires dread, just shift the mood in your space: "Light a candle, bring out essential oils, and set an intention—do whatever you need to do to make yourself feel comfortable."
Try a reverse money journal.
A way to be proactive about your choices could be to front-load your money diary. For me, this is how that will look: Every month, I'll start with how much money I have coming in (aka my paychecks), and then I'll start working backward: I know how much rent and utilities are, my yoga studio's membership cost, and I can roughly guess how much I'll need to spend on food and other basics. Then I'll factor in preplanned monthly expenses that aren't necessarily essentials, like a quick weekend in the country, a concert I'm planning to see, or a friend's birthday party. I can divide up what's left for any extras: Dinners out, shopping, donating, or adding more to my savings.
"This is going to look different for everyone; it's just about where you are at," says Tessler Linden. "And then keep watching where your intentions started and how you are meeting them throughout the month. It's not a strict diet; these numbers can shift, and that's OK. But you do need to check in with yourself."
In the end, my abandonment issues with my money diary weren't as much about the act itself—and whether it was good or bad—it was about how I was handling it. Like journaling your thoughts or intentions, it's about being mindful: this time, just with your bank account.
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