We heard that some financial experts recommend you record your expenses for a month before you begin setting up a budget. Their idea is that recording your expenses for a while will likely give you a better idea how you spend your money, and this, in turn, will make it easier for you to budget appropriately.

We agree with this idea only to some extent. We agree with the notion that you have to record your expenses. However, 30 days is not some magic number – you could choose another period if you like. And we don’t think that recording expenses has to be the very first step. You do have to record expenses, but you can do it after setting up the budget. It is perfectly okay to spend some time thinking about your household expenses without recording your expenses first. In fact, setting up a budget may very well be a good step in the right direction, if you want to get control over your spending.

It’s like deciding you want to get on a diet. Some will say it’s very important to do a food log – but do you have to log all you eat for a month before you take any action to control what you consume? Maybe you want to start by saying something like “I want to control sweets, and eat more vegetables.” Sure, you haven’t taken four weeks and logged how many desserts you ate last month, and maybe you don’t yet know that you eat far more yellow/orange veggies (like squash) than you do leafy greens. But that’s fine, isn’t it? The important thing is to make a commitment and get started.

However, you do have to record expenses. If you set up a family budget and you do not record your expenses, what good does a budget do? You have to figure out whether to stuck to it. To take the diet analogy one step further, that’s like saying “I’m on a diet” but never bothering to check how much you actually eat.

Once you have set up a budget, you want to see how well you are keeping the budget. You can only check your progress by recording your expenses. When you record your expenses, you can then see how your actual expenses compare to the planned expenses of your budget. The budget only tells you how you think you spend your money or how you should spend your money.

Let us sum it up. Recording your expenses is one of the cornerstones of keeping a budget. But we don’t think that this is the “right” or only way to start the budgeting process. Think about it: keeping track of all your expenses, including your morning coffee and the candy bar treat in the afternoon, takes a lot of discipline, effort, and a real commitment. If you fail to record all your expenses, you might very well give up on setting up a budget altogether, let alone living by a budget. If that might happen to you, and that is exactly the opposite of what you want to do, it just can’t be the right thing for everyone. That is why we think it is better to get the process started, to set up a budget, and only then to record your expenses. If you’re game, or already in the process, good luck! (In case you want to know, I’m dieting AND budgeting!)

Tags: family budget, setting up a budget