Tracking the Financial Bogeyman

Tracking Income and Expenses

One of the most important weapons to use against your financial bogeyman is tracking. Simply put, tracking involves noting all the money that comes in and all that goes out. Every time you spend or receive money, you will write it down, whether you’re paying with cash, check, or a debit or credit card; whether you’re receiving a check, an automatic deposit, or cash. For each expenditure, you’ll need to record three simple things: the amount, to whom you’re paying the money, and for what it was spent. For income, you’ll note where the money came from, and the amount.

While tracking means writing down every financial transaction, it’s broader than just jotting down numbers. Tracking is a way of becoming and remaining mindful about your everyday interaction with money — not just how much you have, but how you’re using it, how you’re feeling about it, and the consequences of your money behaviors. Being disconnected from your money behaviors reflects being disconnected from yourself. It causes you to act in ways that contradict your own best interests. It sabotages your progress toward your goals.

Overcoming Resistance to Tracking

When I explain to clients that tracking means writing down everything that comes in and everything that goes out, I can almost hear the sound of screeching brakes. “Everything?” they ask, with a quaver in their voices. “You mean, I should track everything?” Smiles wilt. Bodies stiffen and hands start to fidget. Faces take on a look of panic. When this happens, I reassure people by reminding them that tracking just means documenting what’s going on. Period.

If you have never tracked your spending or earnings, you’re not alone. Many of my clients have never tracked their money prior to our work together. People tend to resist the idea of tracking more than anything else in this process. Below are some of the reasons and objections they state.

• It’s too hard to track everything.

• I don’t have enough time.

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• It can’t make that big a difference.

• I already do that in Quicken.

• Little stuff doesn’t matter that much.

• I keep track in my head.

• I check my balance online or at the ATM.

• I don’t like to think about money all the time.

• I’m just not a numbers person.

If any of these objections resonate with you and you are still feeling reluctant about starting tracking, ask yourself the question that TV personality and psychologist Dr. Phil McGraw has made famous: “How’s that working for you?” If your answer is “Not so well,” then tracking is a big part of the solution.

Taking a Good Look at our Spending Habits

We resist tracking for lots of reasons. It’s a change of habit, and most people find that changing behaviors can be hard — even when they really want to make the changes. When trying to make even small changes, many folks find that they start out okay but slip back into their old patterns before long. However, when it comes to the seemingly simple change of tracking our money, our resistance reflects more than a mere reluctance to change.

Even if we’re experiencing excruciating pain about our relationship with money, it may be terrifying to take a good look at what’s really going on with our spending, saving, and earning.

Facing Up to our Financial Reality

We may know that our income doesn’t support our eating out as often as we do or that we spend more than we know is wise. We might already understand that we can’t really afford to provide as much support as we do to our adult children, that our home or car is more than we can actually afford, or that our retirement plans are not realistic.

It can be hard to face these realities. We may feel guilty or embarrassed. We fear that our spending will be judged and that by revealing the amounts we spend on certain items we’ll be “required” to give up things that we enjoy. But tracking is a tool, not a weapon for beating ourselves up. It’s just information.

Some people know — either consciously or somewhere deep inside — that their patterns of spending might illuminate other troubling or addictive behaviors, such as excessive eating, gambling, or drinking. For these people, Financial Recovery can be a bridge to healing other parts of their lives. You’ll discover through tracking that the numbers tell the story.

The Surprising Benefits of Tracking

Every step of Financial Recovery is predicated on the reality of money without the shrouds of fantasy, magical thinking, and denial. When we’re unconscious about our money behaviors, we can spend in ways that get us into emotional or financial trouble. But when we become conscious of our money behaviors by using tracking, the financial fog clears.

So often, people find that the mere act of tracking their spending makes them think twice (or maybe three or four times) before making a purchase. As a result, they may make fewer impulse buys. The accountability created by tracking raises our awareness enough that we make wiser choices that are in keeping with all our goals.

Though I’ve grown a great deal in my relationship with money, tracking continues to keep me conscious of and connected to my spending. It remains an ongoing process. Knowing that I’m going to write down a purchase allows me the time to ask myself if I need to make it — if I really need to make it.

Tracking Provides Insight for All Income Levels

Some of the wealthiest people with whom I’ve worked have come to appreciate tracking. Tracking keeps you connected to your money in an immediate and ongoing way. Whether you are of wealthy or modest means, the ritual of tracking and the insights that it gives are the same.

The commitment to tracking is not itself the goal. It’s merely the path to the goal. Clarity is the goal. And clarity connects us to our spending and earning so that we can have a healthy, honest, and empowered relationship with money.

This article was excerpted with permission from the book:

This article was excerpted from the book: Financial Recovery by Karen McCall

Financial Recovery: Developing a Healthy Relationship with Money
by Karen McCall.

Reprinted with permission of the publisher, New World Library. ©2011.

Click here for more info and/or to order this book.

About the Author

Karen McCall, author of the article: Tracking & the Financial Bogeyman

Karen McCall is the founder and owner of the Financial Recovery Institute. Since 1988, Karen has counseled individuals, couples, and businesses through a holistic, transformational approach that results in a stable and secure financial foundation. She has been featured in such publications as Money Magazine, Entrepreneur, and USA Weekend. She was featured on the PBS series The Financial Advisors and was the host of the radio talk show Mental Wealth. Her published works include It's Your Money: Achieving Financial Well-Being; The Financial Recovery Workbook; and as a contributor to I Shop, Therefore I Am: Compulsive Buying and the Search for Self, a book for mental health professionals. Visit Karen's website at

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