As you guys that already read this blog know, I don’t suggest what I think is just dumb stuff for saving money – one well known Aussie money dude always suggests just not drinking a coffee every morning and saving yourself $3 a day.

Anyone know a cool 7-yr-old? I snapped this in Chinatown

See, I enjoy my morning coffee, and I think that’s kind of dumb – what about making your money work so well for you that the $3 coffee shouldn’t matter? So it is kind of strange for me to be writing a post about how to work out on a simple level if you’re just spending too much day-to-day, but if you want to turn around your money life, you have to. Most people suggest you keep a diary of everything you spendfor 2 weeks or even a month – are they kidding?! That sounds like waaay too much hassle, I’d give up after a few days. So, here’s the best way to find out if you’re spending far too much money in everyday life: keep a notebook close by, and write down everything you spend (seriously, everything, include stuff as small as a Mars Bar or whatever) for two working days and two weekend days – say Thursday, Friday, Saturday and Sunday of the same week. Interestingly, it is tough to make this true to your usual spending life, because some reckon that just keeping a diary makes you spend less, because let’s face it, it could be too embarrassing to write; “Deli: dip and crackers, $17.50″ even to yourself. Regardless, stick with it, and write down absolutely everything. Mine read like a classic after 4 days when I did this myself a few years ago – and it gave me a big wake-up call: if I wanted to have enough money to buy an apartment, why on earth was I spending so much money on things that could easily fall into the category of “Miscellaneous Crap”?

The idea of this spending diary is that it is supposed to illuminate where you’re going wrong with your everyday spending. Did you spend $9 on bottled water, or $29 on unnecessary taxis? It is that kind of stuff that a spending diary is aiming to get rid of. Then, (here comes the scary bit, but if you’ve read this far, read on) use it work out whether you really do earn more than you spend. Divide your (net) wage so that you get an idea of how much you’re earning after tax each day  … then check out what you are spending in comparison. Remember, this spending diary shouldn’t represent the majority of your income: that stuff should be your rent or mortgage, other investments, etc. This diary should represent the minority of your net income. And if this diary has the majority, all of, or more than what you’re earning each day in there, you need to drastically change your spending. Good luck.

And don’t forget if you’re enjoying my blogs, to sign up (and confirm sign up) to my weekly free email. Oh, and as usual, here is my friendly disclaimer.

Older posts you might like: How to get your Credit rating checked – free. And why you should never keep too much money in your everyday banking account.

Share on Facebook