Numerous times, a parent would bring in their 16 year old to open a checking account. I’d ask them about opening a savings account a well. The parent would answer “he/she doesn’t need one.”

Tracking expenses is paramount to managing finances. If I told you to walk from home to work while wearing a blindfold, you’d probably have a bit of trouble getting there. You might even get hit by a car. It’s the same with finances. Close your eyes, even for a second, and you risk getting hit by something unexpected.

It used to drive me crazy when people would complain about overdraft charges when, by their own admission, they didn’t keep a register. They wouldn’t even pay the minimum amount of attention! And this isn’t an exageration. People have told me that the bank should call them if they run out of money.

The complete lack of financial education is disturbing. There is nothing more basic to survival then effective managing of resource. If you were stuck on a desert island, you’d ration your food and make sure you don’t run out. That’s simple resource management. Money is simply a way to manage a very large number of resources- but only if we pay attention.

What I have learned from this experience is that when you track down all your expenses you tend to think twice before spending your money. You know that you will have to write it down somewhere, which is more committing than simply swiping the credit card and be discouraged once you receive the bill a month later!

This reminds me that I should consider going back to my good habit of tracking down my expenses ;-)

I find it easy with Microsoft Money. It provides nice chart of your spending categories at the same time.

This has let me track my expenses in just a few minutes a week, and you’re right that knowledge is power! I found some areas in my spending habits that I could easily change to gain some extra cash.