I've set as one of my goals this year to track my finances better. Getting the process down is the goal, and one part of this process is making sure that the receipts don't pile up too high. So I've set as a goal to clear out my receipts at least ten times a month.
Most of my accounts have some mechanism for downloading transactions into Quicken, which of course is very convenient and saves a lot of time. I'm not using these services for now. For now, I want to go through each receipt individually and categorize the expenses properly. For example, if I go to Wal-Mart, some of the expenses will probably be groceries, but there might be housewares, entertainment, medical, and auto expenses, too. A download from my credit card might put the entire receipt in one category, but it won't split it up for me. I can of course split up the transactions if I want after downloading, but I don't have to, and making things too automatic right now doesn't encourage me to scrutinize the purchases.
Watching each purchase and giving it due attention is part of how I'm building some discipline into managing our finances. We've been able to get by with budgeting using The Force but with a family it's harder to get away with doing it this way on a (fairly) modest budget. We're not on the verge of needing to carry a balance on a credit card, but we're not socking away a ton, either. Hopefully this will lay the foundation for better spending and budgeting habits.
Does tracking your expenses so closely really pay off? Perhaps simply adopting a broad frugal approach is the way to go. It just sounds so extremely time consuming with all those receipts.
-Raymond
Raymond: Looking over the receipts is how I hope to find the weak spots in our spending. Then we can practice targeted frugality. (At least we'll know what we have to cut back on the most.)
My tracking method may not work for everybody. First, you use a credit card that you pay off every month and which gives you cash or some other reward. Charge everything possible here unless yu get a better deal on special things such as gasoline from another card.After you receive the monthly bill, go through all the receipts (you'll probably already have them in roughly chronological order in your file). Categorize as you enter them.Set aside those you need for tax purposes. I use paper because it's quick and portable. I keep a tally of cash expenses, which isn't time consuming because I don't use cash when I don't have to. If you use department store, gas or specialized cards (LL Bean, for example), the tally is usually simple. You can usually keep it in your register for check or online payments: "LL Bean card: $___ clothes, $___household."