track all expenses

Action

Record every expense.

Discussion

In terms of simplicity/impact ration, this is one of the heaviest hitting patterns.

Note that this pattern is not keep a budget. This pattern by itself doesn’t tell you how much to spend. It just requires you to track – and therefore know – how much you do spend.

It’s terribly easy to be wrong about how much money we spend. If we don’t record it we tend to have a vague sense that our money just magically sort of drifts away. We’ll be wrong about how much money we spend on food vs. clothes vs. “random stuff”.

Tracking every expense and organizing the categories makes it impossible to fool ourselves.

And if you do choose to set a budget or set a target cost of living, you will go in armed with the knowledge of where you are actually at.