Why Expense-Tracking Often Ends in Failure

Simon Zhen

By  Wed Feb 20, 2013

Simon Zhen is an analyst, staff writer and columnist for MyBankTracker.com. His columns draw focus to all aspects of personal finance and to bank rates, products, and services. More Columns »

Daniel Oines / Flickr | http://www.flickr.com/photos/dno1967b/6353737827/

Daniel Oines / Flickr source

When it comes to financial duties such as making Roth IRA contributions or transferring money into a savings account, I gladly carry them out with Nike’s “Just Do It” slogan in mind. But ask me to track my expenses and I couldn’t be less enthused.

Following the expense-tracking challenge that the MyBankTracker team undertook, I’ve confirmed to myself how mind-numbing it is to manually log every single purchase — you’ll remember to do it one time and then forget it the next.

One afternoon, I was trekking through Chinatown to pick up a few items in various supermarkets, where cash is the only form of payment. Still early in the challenge, I was motivated enough to pull out the small notepad and pen to jot down my spending.

Then, I proceeded to grab some takeout before heading to the bodega for snacks. With my wallet a little thinner and my hands occupied with bags full of food, getting home was the top priority — tracking expenses was the last thing on my mind.

Before you know it, I’m in the office — reminded of the challenge — trying to recall how much I spent the day before. Since most of my expenditures were made with cash, not a credit card, it isn’t as easy to keep accurate records of my spending.

After repeated attempts to track expenses, and failing, it becomes a tedious chore that you’d rather avoid altogether. This tends to be the case for many people who’ve tried to track their spending.

Furthermore, I don’t belong to the league of consumers who finds any advantage in keeping meticulous records of every cent spent. My commitment issues with expense-tracking stems from my disinterest in the idea of budgeting.

While many financial experts advise establishing budgets, I’m a firm believer of transferring a decent portion of my income into savings and allowing myself to spend the rest as I please. I’ve never been in a situation where my spending triggered spending alerts telling me that my checking account balance was dangerously low.

Once a week or so, I’ll simply pull out Mint’s mobile application to get a quick peek at how much I spent recently (without really stressing over each transaction amount). Although the app lets you input your cash transactions, I’ll never stick to it. Alternatively, I watch for ATM withdrawals, which usually indicates how much cash I’m using.

For me, that’s the closest thing that comes to tracking expenses.

 

Add Your 2 Cents

  • Carla Frett

    As per my concern the key factor of failure of expense tracking is the hassle that comes on the way of expense tracking and reporting. Just think for a while when there will be quite a huge amount of terms to be considered for the expense tracking and reporting, definitely the hassle will come up in the way and ultimately that is what will lead to the mistakes basically that will on the other way lead to the failure. So basically the visualization says that the main cause of the failure starts from the initial stages only.

    I think that the better option to get rid of this kind of consequences is only to go ahead with the deployment of tools which are automated in fashion. The initiation only that needs to be started is to scan the receipts and make the things carry out in the procedural way mentioned by the tool. And here with the result comes up with an accurate standard.

    Whole lots of tools are available in the market but again choosing the best one even make better sense. As a sales coordinator the expense tracking and reporting happens to be the part of mine activity in my office and the deployment of tools as well. When I started my career I did a eventual research and as of now I am dependent on cloud based expense reporting tool that makes the tracking and reporting go in a hassle free and better way. I am currently using Replicon’s expense reporing software ( http://www.replicon.com/olp/expense-reports.aspx ). Expense reports made up of the tool some what is feasible and better than the manual form of reporting basically.

  • Em

    I think it depends on the situation. As a recent college grad who only makes $1,200 a month, a strict budget is key. Without it, I’d probably overdraft, let alone manage to save anything. Mint.com has been a good tool to keep track of my budget fairly effortlessly (I use my debit card for just about everything.)

    Maybe someday if I ever have a salary that lets me live less “paycheck to paycheck”, I’ll feel like you do. But until then…