Question about tracking savings

[dshep]

Hi,
Hopefully I will be able to ask this without confusing everyone ( I have a bad habit of typing what I am thinking, in spurts, tend to lose everyone..lol) Anyway, How do you keep track of your savings, and where do you put that money? And exactly what do you keep track of... Example
I needed a new grater and electric knife and some towels. I found the towels online to a store I had a 20 percent off code. Towels were 9.99 marked down to 4.99 hence a 5 dollar savings off each towel. (I bought 4) The grater and knife were not on sale, but I can not make zucchini bread without a grater, I tried, trust me it doesnt work... and the electric knife just died after 20 years, go figure..lol Anyway.. the 20 percent off... came to 10.83. So, do I count just the 10.83 or do I count the 5 dollars off each towel too? Next... should I just write myself a ck for the savings and put it in the savings jar? and What do I while I am tracking it on paper.. the 20 percent off.. or both the sale and the 20 percent off? Oh So many questions... and I am sure so many good answers!

Thanks for all your help.

[Broken Arrow]

Uh....

Is it possible to just jot down a list of the items and the savings that you made with each item on a legal pad or something?

As for what to do with the savings... I guess it depends on what you want to do with that money, right?

[Ima saver]

Well, If you have the cash, I would count the $10.83 and the $5 off of each towel. I pay myself cash and put it in a cash box'; once a month or so, I put it in high interest paying savings account. I keep track of it on a note pad, sitting by my computer.
Is this for your $20 challenge ?

[Fern]

I disagree with the others. I would simply track the bottom line, eg, what you spend each month, in various categories, and at month's end, tally that up with your income, then figure your net gain/loss.

It's not realistic to say "I saved $4 on dish towels today so i can put that money toward some other purchase." Becus so-called sales and other store specials are simply marketing gimmicks, aka incentives, to get you in the store to buy stuff. Sometimes, the sale price is really not a sale price at all. So if you really want to save $, then simply don't buy anything at all, keep it in some sort of account and that will be reflected in your net gain/loss at month's end. The only savings that really matters is what's left in your bank/investment accounts at the end of the day. Why give yourself a headache trying to track individual savings on each item purchased? Just track what you paid for it.

[autoxer]

Originally Posted by Fern

I disagree with the others. I would simply track the bottom line, eg, what you spend each month, in various categories, and at month's end, tally that up with your income, then figure your net gain/loss.

It's not realistic to say "I saved $4 on dish towels today so i can put that money toward some other purchase." Becus so-called sales and other store specials are simply marketing gimmicks, aka incentives, to get you in the store to buy stuff. Sometimes, the sale price is really not a sale price at all. So if you really want to save $, then simply don't buy anything at all, keep it in some sort of account and that will be reflected in your net gain/loss at month's end. The only savings that really matters is what's left in your bank/investment accounts at the end of the day. Why give yourself a headache trying to track individual savings on each item purchased? Just track what you paid for it.

That's how I feel too. It sounded more like tracking spending than tracking savings, but I know that it is just a trick to increase your savings. When I first thought about how I track my savings, I check my net worth spreadsheet to see how much is in my savings account and how much is in my brokerage account. That money is saved for later.

Last weekend I used a coupon to knock $21 off of my restaurant tab, but I don't think of that as saving $21, because I wouldn't of gone to that restaurant if I had to pay their full price.

[Ima saver]

Well I guess I agree too. Because I don't buy something that I don't usually use just because I have a coupon. So I think I gave bad advice. I don't think you should take off $5 for each towel. You could probably buy useable towels at the dollar store much cheaper. You are right, lots of time the sale price is really not a sale price at all.I worked at a carpet place and we always put up sign saying that a certain type of carpet was on sale, but that was the regular price all along.

[dshep]

Thanks for the several replies, since I am new here, I am trying to take several things I have read and put them all into one budget... No I am not doing the 20 dollar challenge yet.. I still working the kinks out my budget.. just getting my feet wet.. I will let you all know when I jump in fully, you will hear my pennies stop screaming, since I wont be pinching them so hard!

I have a problem with just keeping it all on paper and leaving it in the cking acct. My cking acct has a hole in it and it needs to be plugged. Money goes in and comes out just as fast.
So I was thinking if I took the money I saved,(like Ima Saver suggested) on things we actually needed (such as towels, I hung them on the line the other day to dry and some were actually saying, "turn me into rags please" ) and put it into envelopes for other needs which are bigger, such as the dryer that quit in June (thank God it was summer out) and needs to be replaced before winter comes or our clothes will be popsicles ... or the new storm door, which needs to be replaced before winter comes. Or even Christmas, I would come out ahead eventually. Some day might even be able to get a high interest savings acct.... and before anyone says you could do it today... Ruff yearly income is 25,000 and 5,000 of that goes towards my sons college tuition. So we live on about 20,000 a year... and I want room to breath, not just get by. Hence the need to start with envelopes I think and plug the hole in the cking acct. If this way doesnt work, I can always adjust it till I find something that does work. I would love to hear more about what other people do...

[autoxer]

Originally Posted by dshep

Some day might even be able to get a high interest savings acct.... and before anyone says you could do it today...

I can't afford to not have a high interest savings account. My high interest savings account is my 'virtual' envelope. I use it to store money for the irregular expenses, so that that money doesn't dissappear like it would if it stayed in my checking account. I tend to spend every last dollar in my checking account before my next paycheck, no matter how much is in there. So if I transfer a little bit from each paycheck into my ING account, then I have it for the larger irregular expenses, like car insurance... but the good part is that I don't even notice it isn't there to spend, because I still spend every last dollar before my next paycheck.

It sounds like you need to track all of your spending for a month or two. Down to the cent, then tally up the categories and see where you are actually spending. That will show you where you need to put the plug in your checking account. Sometimes it isn't very obvious until you add up all of the little stuff.

[starving_student]

Maybe you should stop thinking in term of saving and think in term of spending instead and just try to keep these spendings as low as it is possible and comfortable for you.

[dshep]

I can think of two replies to saving money on the towels.. one you are right, I might not have saved on the towels...

and the other is I had to buy them... so I looked for the best price I could find for the color and size and thickness I wanted. The dollar store is an hour away and its hit or miss with the one I go to.. sometimes they have great deals on what you want.. and other times they dont. I put all new self stick linoleum tiles in my kitchen and backroom from the dollar store. I have never seen towels that will last in there. It would make no sense to me to spend 4 dollars on a bath towel that is going to come apart after a few washings... to me that is a waste of money. Trust me, I have gone the two cheap route before and ended up having to replace what I bought a few months later... so I actually wasted money...

If I try and justify the whole thing, there was no implusing shopping at the mall, I saved money on gas, ( $3.00 a gallon, Midsize SUV, a hour away) having it shipped to the house, I saved money on towels, (normally I buy walmart for the same price I paid, but they are smaller then the bath sheets I bought) and I saved 20 percent on the entire order... So perhaps I will just take the 10 dollars I saved (the 20 percent) and use that in the envelopes. Am I making any sense?

As for the suggestion of putting the money in High rate savings for things such as car insurance... I pay that monthly..so I would just have to transfer it back out once it got in there.. but it was a great idea.
They idea of keeping spending low... is the right track.. it will enable me to save... I hope..

[Fern]

The problem with envelopes is that it is too easy to take money out of there for other purposes. When it comes to day to day living expenses, i have a non-interest bearing checking account. I probably could do better if i shopped around, but it's convenient, i guess. My paychecks are automatically deposited there. I know that my monthly expenses usually come out to about $2,000, so when the money in the checking account accumulates well over that amount,, then i transfer (write a check) out of there into my 4.5% interest bearing money market. so the non interest checking acct at my local bank is just for paying routine bills. the MM acct that pays interest is an online bank and represents my emergency stash. i never really touch this money unless i am unemployed or need to buy a new car. The rest of my $$ is in mutual funds which i never touch as that is for the most part retirement money.

I'm sure the vast majority of people aren't as anal about this as me, but for well over a decade i have routinely tracked ALL expenses, then tallied up income/expenses at the end of each month. So i routinely save all receipts to later log into my expense statement. If it's something i wouldn't normally get a receipt for, i jot it down on a piece of paper until, again, i can record it on my expense statement, which is just a homemade 2 pager with about 20 different categories for all my main expenses, which include: mortgage/property taxes, health costs, homeowners, groceries, dining out, electric, oil/heat, phone, cable, clothing, Internet and stuff like that. I have a pretty good handle on what i spend on at any given time.

The end of the year is the fun part, cus after tallying up everything from each month you really get to see the big picture, and then you can compare it to the previous year as well. If you don't enjoy doing this stuff, and yes, i'm analytical by nature, you likely won't stick with it, but perhaps an abbreviated version of this might do as well.

I also know, from long ago having done a tally of my typical expenses and my typical monthly income, how much discretionary income i have to play with each month. Not to say i'm automatically going to spend it all, but it's good to know roughly how much discretionary spending you can do (for me, i think it's about $500 a month) without having your expenses exceed your income.

[vsjhoc]

Originally Posted by Fern

I'm sure the vast majority of people aren't as anal about this as me, but for well over a decade i have routinely tracked ALL expenses, then tallied up income/expenses at the end of each month. So i routinely save all receipts to later log into my expense statement. If it's something i wouldn't normally get a receipt for, i jot it down on a piece of paper until, again, i can record it on my expense statement, which is just a homemade 2 pager with about 20 different categories for all my main expenses, which include: mortgage/property taxes, health costs, homeowners, groceries, dining out, electric, oil/heat, phone, cable, clothing, Internet and stuff like that. I have a pretty good handle on what i spend on at any given time.

Fern - Good to know that I'm not the only anal one. I do this kind of tracking but only for about 4 months of the year. You are so diligent! Who needs the Excel spreadsheet or Microsoft Money for Morons -- paper works just fine.

[Ima saver]

Because I have done the envelope system for 40 years, it works for me. When I first got married I had no checking account and few bills, so I started dividing the cash money (cashed the paychecks) into envelopes. So much for rent, food, car payment, utilities. (back then)
Then I got a checking account. So I still cashed the checks and put the money into the envelopes. Twice a month, I pay the bills. Then I take all the money out of the envelopes and put it in my checking account to cover the bills.
My checking account can never "leak" because there is no money for anything else left in my checking. I know that i can write no other checks.
I give myself an allowance and pay cash for everything else, like eating out, gas , liquor, etc. If I use all my allowance, I am done.
If it is something I must have I charge it. I allow myself $240 in my visa envelope and that is the most I can charge!
If it is a large expense and a must have (new tires,) it comes out of my high interest savings account!

[abowers]

Keep track of it with cash, or Have a separate saving account and transfer money (i.e. online) from your checking to savings account when you save money.

[Broken Arrow]

Originally Posted by vsjhoc

Fern - Good to know that I'm not the only anal one. I do this kind of tracking but only for about 4 months of the year. You are so diligent! Who needs the Excel spreadsheet or Microsoft Money for Morons -- paper works just fine.

Hey now. I too would like to join the club... because that's what I do as well.

Of course, I get to cheat a little bit thanks to technology doing all the work for me.

[vsjhoc]

Originally Posted by Broken Arrow

Hey now. I too would like to join the club... because that's what I do as well.

Of course, I get to cheat a little bit thanks to technology doing all the work for me.

Yet another person afflicted with Compulsive Expense Tracking Disorder ...

I'm thinking of trying Jesse's YNAB -- it looks pretty simple and there has been a good response to it in some of these posts. Any thoughts?

[Broken Arrow]

Originally Posted by vsjhoc

Yet another person afflicted with Compulsive Expense Tracking Disorder ...

Guilty as charged!

Do I get bonus points for the fact that it's always available with me, on my cellphone, including my budget, my debt tracking, as well as my net worth?

[vsjhoc]

Originally Posted by Broken Arrow

Guilty as charged!

Do I get bonus points for the fact that it's always available with me, on my cellphone, including my budget, my debt tracking, as well as my net worth?

Please, I beg of you, go blow $5 tonight on something, anything, and record it as "miscellaneous."

Are you tracking your 3 FICO scores up to the minute as well?

[Bookie]

Oh good. A meeting of Compulsives Anonymous. Can I sit in?

My name is Bookie, and I'm a Compulsive Expense Tracker. I carry a daily index card on which I record any (and I do mean any) spending that I do. The amounts are transferred to an Excel spreadsheet {Date, Amount, Purchase, Category, Notes]. The workbook has a sheet for each month, and I've been keeping these things for years.

Savings Accounts have their own Workbook with a sheet for each account and a linked summary sheet that automatically updates.

Finally, I run my check register in a programmed Excel spreadsheet that also serves as a budget planner.

You think there's any hope?

[tgavin71]

Hope That I don't know but what I do know is that I am a reformed Compulsive Expense Tracker. I used to track every cent. Which is good to do for a while to assess where the money goes but after a few months it become a big pain. If I were single it wouldn't be too bad but with a partner who travels for work it is hard to keep track of what he is spending. Usually he was pretty good. Though rarely did the actual amount spent equal what he told me. Sometimes my spending tracking was out at the end of the fortnight by $20 other times by $200. It caused a lot of fights.
Now what I do is this. After going through each bill I work out how much I need to put away fortnightly ( this is when we get paid) all of these amounts in our case is $600. Included on the list are school excursions, kids activities, gas, land line, mobiles, internet, car, home and contents insurance, water, rates, electricity, rego, car repairs,christmas and holidays. This $600 is automatically transfered into a high interest saving account and I transfer it back when I need it.
Hubby gets $150 a fortnight which he uses for everything he needs. Food, clothes, entertainment etc.
$725 comes out in automatic payments for the mortgage, car, sharefund and education.
The balance of $600 is taken in cash for everything else. However I often find I have a lot of this left over at the end of the fortnight.