How to create and use a Spending Diary - Eastern Savings and Loans

How to create and use a Spending Diary

Posted on April 23, 2024

How can a Spending Diary help you to Spring Clean your Finances?

Why should I fill out a Spending Diary?

Making a spending diary gives you an idea of your total weekly expenses. We don’t always keep track of everything we spend every week. For instance, you might go to the local newsagent to buy a newspaper or buy a soft drink. Or you might buy some sweets for the kids after school. It’s this kind of spending that we don’t always think about and often forget about, and it does add up! If you want to review your spending, using a monthly Spending Diary can help you do this, and it can also help you identify areas where you can reduce your spending.

How do I fill out a Spending Diary?

If you fill in your diary every day listing where you spent money, at the end of each day, you will know how much you spent that day. When you add this up, every week or over the month, you can begin to get a picture of where your money goes. You don’t have to carry around a notepad all the time. You can write down your expenses as they happen on the notes page of your phone. Then, you can transfer the information to your Spending Diary from the notes page. The best part? If you forget to write down your expenses one night, you’ll have the notes on your phone to remind you. Or, if you don’t use cash and all your expenses are on a debit card, you can go through your online bank app each evening to write down everything you spend each day.

What if I forget how much I spent on something? Should I just make up a figure?

No, a budget isn’t going to work unless you’re honest with yourself. Use your bank app or, if you’ve spent cash, find out how much you spent online and fill it out. If you’ve forgotten, just say “I’m not sure”. You’ll get a pretty good idea of your spending over a month anyway.

What if I forget to do it for a few days?

Don’t worry, it’s okay. It would be great if you could do this all the time, but sometimes life gets in the way of completing it every single day. If you find that you can’t use the diary, you can start again with your banking app or keep all your receipts and log it when you have the time, whatever works best for you. Don’t be scared to try again.

Compleating your Spending Diary

Schedule your spending diary for Monday to Sunday as Monday is generally considered the first working day. Of course, you can start any time of the week – just make sure you start a new one each week. Make sure you write down all the numbers for all your spending, even if it’s a small amount. There are many times when you’ll spend money on things that you don’t normally spend money on. This may not seem important, but here’s a list of some of the “little things” you might spend money on that might come up unexpectedly:

  • Going to the shop for a top-up shop for a few fresh bits
  • Going for a coffee with a friend
  • Buying sweets/treats for the kids
  • Paying for parking or bus fares
  • Takeaways, or food out
  • Birthdays and gifts

Don’t forget to check your bank statement and record Direct Debit and standing order payments made on a daily basis. If you don’t, include these payments in your weekly expenses at the bottom of the diary.

What do I do after I have completed a Spending Diary for a month?

Your Spending Diary can then be used to calculate your monthly budget. Now that you have a clear overview of all your expenses, you can identify areas where you can reduce spending. This will help you feel more in control of your money. Take a look at our article “How to create a budget you can stick to” for more in-depth budgeting tips. Save Saving Expert Saving Expert Saving Expert Turn2Us.

Work it out!

For your budget you will need to know all your income, this includes your wages, DWP benefits (including Child Benefit), any contributions from anyone else living in the home, and Child Maintenance payments.

To work out your expenditure you’ll need to gather all your Current Bills, which are typically the same amount every week or month. These include: Rent or Mortgage, Gas & Electricity, Water, Phone & Internet, Council Tax, any loan/credit card repayments, and Home, Car, or Pet insurance.

On a separate line, you can use your Spending Diary to enter Essential Regular Expenses on items you need, such as food, clothing, travel expenses, etc. These are the essential costs only!

Next, use your Spending Diary to list all the Non-essential Spending you’ve made over the course of the month. You’ll need to add up each day’s figures for each item and write down the weekly total for each type of expenditure. For example, you’ll want to know how much money you spent on popping into the corner shop to pick up the kids after school? Takeaways? Treats out and about? Once you’ve added up all these items from your spending diary, you’re left with a total of ‘Non-Essential Spending’.

It’s time to look at where you can cut costs.

Your Non-Essential Spending is the first category you’ll want to consider reducing. Are you able to do without some of these items, or do they need to be done less frequently? Can you make changes to your spending habits to reduce non-essential expenses?

Next, consider your Essential Regular Expenses. Are you able to save money by buying in bulk, cooking in bulk or meal planning? Read our blog “How to save money your weekly shop” or follow us on Social Media where we regularly share tips on how to save money.

Finally, take a look at your Current Bills. If you’re out of contract with your mobile or internet provider, could you cut costs by switching or negotiating a new contract? Are you able to reduce your monthly gas and electricity bill with some energy savings tips? Are there any discount schemes you can apply to to reduce your water bill? Are you looking to save on your broadband, Money Savings Expert have a blog called ‘How to Get a Better Deal on Your Broadband’.

What’s Next?

The goal of the Spending Diary is not to ‘go without extras for a month’, but rather to gain insight into how you spend your money so that you can make adjustments and focus on specific areas where you can cut your spending so that you can feel less pressure at the month’s end, and perhaps save some money for a special treat, like a holiday or Christmas.

Don’t forget about it. It’s easy to lose focus after a while and slip back into old habits. Make it a goal to finish a spending diary at least once a week to ensure you’re on track. And when you’re reviewing non-essential expenses before you buy, take a moment to ask yourself, do I really need this…?

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Authorised and Regulated by the Prudential Regulation Authority

Members of ABCUL

Your money is protected up to £85,000

Authorised and Regulated by the Prudential Regulation Authority