There are many personal finance tools that help automate managing our expenses with fancy graphs and stats on our expenses. Mint, for example, uses data from your credit cards to generate graphs about your spending across categories. Each of your credit card apps likely do so too. But, if you’re in it to be on top of your expenses, I’m still a big fan of managing expenses on a Google Spreadsheet.
I’d shared a simple Google spreadsheet template in a post on calculating expenses 6 years back. We still use an evolved version of that template (happy to clean up + share an updated version if it is valuable to you). And, managing our expenses involves entering each expense. This process has friction built into it by design because the friction inspires consciousness.
We get all the other benefits – we always know exactly how much we’ve spent across major categories. And, we have a wealth of historical data cut in a way that makes sense to us.
We recently compared notes on how we do this with a couple of friends and they tested the “old fashioned” spreadsheet approach as well. Their first reaction after switching was that their spreadsheet made them acutely aware of the areas where they wanted to minimize expenses. This is so true – it is effective to the point where you soon realize you don’t need a budget.
Every technology tool creator’s goal is to make our lives more convenient. But, it is on us to both find the right tools and add the necessary amount of friction to use these tools consciously.
And, as far as topics that are as important as personal finance go, the more the consciousness, the better the long term outcome.