Sally at InDenialHealth wrote an interesting post this week about how keeping a food diary helps you lose weight. I’m not surprised by this at all because I’ve been using this same exact method to track my spending for the last five years and it has had a huge benefit.
The article at US News mentions why keeping a diary is so powerful for weight loss. I’ve changed this a bit to show how it’s powerful for saving money as well.

It’s simple. I use a Day to Page diary but you can also use your computer. I guess I’m just old fashioned ;-) I try to track my expenses daily by keeping all of my receipts but sometimes I’m just too busy so I’ll do two days in a row. If I’m not given a receipt (I always try to ask for one) then I use my online bank account to get that information.

It’s eye opening. You actually see where your money is going which is probably a shock for some! By putting your expenses down in black and white it really forces you to face them head on. You can’t just stick your head in the sand and pretend things are going to be okay.Those daily lattes add up. Being forced to be aware of what you’re spending your money on can often be enough to help people start saving.

It helps you track your progress. You can see where you’re making mistakes and can correct them. Since I’ve been doing this for years now I’m able to look back at my 2005 diary and see how my spending habits have changed. It also helps provide encouragement when you start to see your savings grow.

You’re accountable to someone. The article suggests swapping food diaries with a friend. I suppose you could do this with a friend but for some, money is a private issue. I think just by writing your purchases down you will be accountable to yourself which should be enough to start people saving.

Starting a “Money Diary” is my number one tip to get on a path to financial freedom. After you’ve done this for a couple of months my second tip is to start a budget. You can’t start a budget until you know where your money is going.
These tips are especially helpful if you are struggling to get out of debt but they’re still relevant if you don’t have any debt and just want to save more.