Thursday, May 20, 2010

Excess of anything is bad

Not long back, till just one and a half months back, I used to be obsessed for tracking my expenses. I am maintaining my excel sheet from last so many years and never thought that I could survive without doing this.

In fact, I used to love playing with my excel sheet. It's so elaborative and detailed that I can tell all the transactions of my all bank accounts just looking at my detailed sheet.

Then one day I realized it is actually controlling me. This happened when my DH asked for something and I told him that "we are over budget in this category, so will you mind waiting for one week so that I can buy this for you next month." Very bad of me. He was being very supportive with me on budget and all after he managed the expenses for a month, but he didn't take it too well. He told me you are being too much finicky about small things and don't realize that probably in few years from now we might not be able to consume these things.

I actually thought about it and then realized that its true. My budget certainly is a very useful tool. We allocate a fixed amount of money each month for our monthly home expenses. Budgeting and tracking helps me save some money every month from our allocated money for home expenses. But what will happen if I'll not be able to save that amount each month. It will not derail my savings plan or retirement savings at all.

So I decided to try something very different for the first time in my life. I paid all the bills as usual. Then I withdraw one-third of original allocated amount as cash and kept in drawer. I told my DH now he can buy anything he wants from the money kept in drawer. No need to inform me as I am quitting tracking for some time. After paying all the bills and withdrawing one-third of the money as cash, I was still having some Rs. 7K in my home account. Few of my bills come towards the end of the month. This made sure that I have money for them. I prepared my self that I might go overboard by some 5K this month. Once the cash got finished, I got more money from my account and again kept them in drawer.

At the end of the month, I was over budget by only Rs. 1500. Yes given due to my strict tracking and budgeting previously, I generally used to save 3-4 K of my home expenses money. It meant that we spent around Rs 5K more then usual. But rather then counting this as failure, I was satisfied. This is the amount that I can certainly afford to spend to have more peaceful life. I am convinced that because of all the good habits that we have developed over years, we will be able to do well just like this month even without strict budgeting.

So, I changed my budgeting and tracking system for now. I am not going to enter each day expenses in my detailed sheet. Rather, I'll just be tracking when I am paying bills directly through my bank account or withdrawing money from there. Once money is withdrawn, it can be spend without noting anywhere where we are spending it. This one month change helped me in realizing that I actually loose my peace of mind sometimes because of excessive tracking. And excess of any thing, even good thing, is bad my dear friend.

As a side note, it was very difficult for me to not-track my expenses. You guys might not believe but in initial few weeks, I used to still open my excel sheet around 5-7 times a day and used to keep staring at it. I used to feel bad for not entering my expenses. But now finally I am evolved. Now I open my sheet only once a day, that too just to update my stock balances and to enter any transactions through my banks. It was tough but worth it.

How about you? Do any of you are also so obsessed for tracking as used to be? Or You guys plain lucky to be not insane just like me?


  1. For me its really difficult to track the expenses. Instead, I plan some amount to be saved and once it is done, I spend the rest amount as I wish.
    And I think sometimes I spend a lot this way. But I want to enjoy things at present only. :)

  2. Thats something thats bothering me even if i dont have an excel on my own.
    i used to ask a colleauge who i saw creating an excel sheet to keep his expenses. I know people who in real life using simple & effective i accoutancy book track every possible transactions.
    But I just keep an eye on my expenses, like just received landline bill, i see how much it has come up, next month i try to control that.
    Basically I keep tracking how much percentage each thing is ( electricity, telephone, internet etc.).