Be Financially Accountable: Keep A Financial Diary

by Silicon Valley Blogger on 2011-10-077

In the corporate world, there’s such a thing called a “status report” that a department or group head will typically require each member of a team to write up on a regular basis. It is written up every so often to take stock of one’s accomplishments (significant or otherwise), to see how much one has contributed to the company’s bottom line. Some employees may see this as a chore while others (such as myself) often view it as a way to track one’s progress on projects and work goals. If you think of it more as a “company or work journal” rather than as a “report”, then it may not come across as such a burdensome task to deal with.

So how well do you hold yourself accountable for the way you handle your finances? Have you thought about applying the concept of a “status report” to other aspects of your life, say, to how you handle your money? Many financial bloggers use their blogs as an online diary of sorts to keep track of their financial progress. Others decide to use simple notebooks to keep a record of their financial activities, along with their thoughts, aspirations and ideas. While others prefer to approach things more quantitatively by using personal spreadsheets and budgeting tools. You can even do a combination of these methods! There are many ways to preserve accountability — and any way is good just as long as you adopt a method and habit that sticks.

How I Keep A Personal Financial Diary For Financial Accountability

In my case, I’ve created my own personal money report to keep abreast of what I’m doing at a higher level. I like seeing the big picture and reflecting on longer term goals this way. Here’s how I go about it:

1. I list down different aspects of my financial life.
2. On a day I decide to evaluate these areas, I write down a simple progress report for each section.
3. Over time, this simple report may tell me how I’m doing and how I should proceed with certain areas. This report may tell me that it’s time to come up with more resources for one activity while hinting to me that it’s time to cut my losses elsewhere. It may tell me that certain areas may need more attention than others.

Financial Diary, Money Status Report

Your own report may differ somewhat from this, but I hope you get the gist of the exercise.

Sample Diary or Journal Entries

I put words to paper (or electronic file) in order to keep a record of accomplishments and mishaps that have impacted my finances. One thing you’ll notice is that I approach this very casually — after all, the easier and the more enjoyable I make it for myself, the greater the chance that I’d continue doing it. Here are some hypothetical examples of diary entries (or status reports):

February 21

  • Online Business: up arrow
    I’ve been working on a new online business. I finally got my new company logo whipped up, thanks to my new business partner. He’s an uberskilled graphic artist who is helping me get my software site up and going. We also checked out Cafepress as we’re interested in selling merchandise. There seems to be quite a few fulfillment sites available for this sort of thing.
  • Blogs: yellow signal
    I did some promotion on a bunch of blog directories. I’d love to know if this is worth my time. Working on the tech aspects of a blog is also quite time consuming. And one more thing: I am now in the process of migrating my sites over to WordPress from Blogger! Better now than later.
  • Stock Watch: down arrow
    In the last couple of months I’ve been following one stock. No worries, we are heavily diversified. But this one stock is a cyclical and I’d like to take my chances on it. I had bought it at its “cyclical” low around a month ago. Then I promptly (read: trigger-happily) bailed out right after the cusp of a rally. I WANT BACK IN! But it’s up 25% now and I’m gnashing my teeth. My quest to build a position ain’t over yet.
  • Budget: up arrow
    I’ve been very good lately. No impulse buying from catalogs in a long while. I must really be preoccupied with these doggone blogs.
  • The Day Job:down arrow
    It’s been a rough week. Deadlines are looming!

March 1

  • Blogs: yellow signal
    Keeping up with content can be tough with everything else going on! But I slog on. Plus, the WordPress migration is moving at a slug’s pace. I have downloaded blog theme designs that I like but it’ll be some work to tailor any one of these.
  • Online Stores: up arrow
    I’m also working on my first Cafepress store. It’s another way to unleash those creative juices! It isn’t quite ready yet but we’re at the homestretch. It’ll probably be ready to show next week.
  • Stock Watch: up arrow
    I’ve been dollar cost averaging even as the markets have stumbled. So far, so good.
  • Real Estate: down arrow
    My house is worth less, according to several news articles that have taken the pulse of the real estate market.
  • Budget: down arrow
    Since I’ve been visiting a nutritionist lately, I’m thinking of spending more on healthier foods. Apparently, that costs more than the usual fare offered in your garden variety Safeway. Plus, we’re probably going to need a new car soon. My wallet hurts.
  • The Day Job: down arrow
    It is still chaotic at work as we try to meet the impending deadlines.

March 12

  • Blogs: up arrow
    It would be nice to make money blogging. But my blogging frequency is still something I’d like to improve and hopefully raise to 4 or 5 times a week.
  • Online Business: up arrow
    So my spouse and I have decided to start an online business. We just got around to choosing a web host. We’re also still experimenting on various for-profit ideas such as web tools and store fronts — I wish I could devote as much time to these as I’d like!
  • Online Stores: up arrow
    We have a couple of Cafepress stores up now and we’re working on some concepts for interesting merchandise designs.
  • Equity Investments: up arrow
    The market has seen some pretty good gains so far and we’re not complaining. For our age, it’s highly recommended to have at least half of our investments in the market.
  • Real Estate: down arrow
    We’re still in a housing downturn. A couple of people who are unloading their houses have told me that there’s a lot of interest and foot traffic during open houses. Home buyers know that they have the upper hand.
  • Career: up arrow
    We just completed a big project. Things are going gangbusters and I’m happy to be part of a great team.
  • Budget: down arrow
    I haven’t been watching our home budget as closely as I’d like. Somehow I keep hoping my market gains cover my weaker showing in this area. I could do better.

Do You Use A Diary To Keep Tabs On Your Financial Health?

For financial categories, you may decide to come up with your own, such as your “Student Loan Status”, your “Tax Situation” or maybe even a “Job Search”. Everyone’s money concerns are varied, so I’d expect a different outline for your own diary.

So have you tried maintaining a financial journal or creating a money status report for yourself before? If not, what do you do to stay accountable to yourself when it comes to your personal or family finances?

Created August 20, 2006. Updated October 7, 2011. Copyright © 2011 The Digerati Life. All Rights Reserved.

{ 7 comments… read them below or add one }

krantcents October 7, 2011 at 2:21 pm

I monitor my bills as I pay them. It is similar to a business where expenses are analyzed for changes and trends. I keep it simple so I can keep it up.

Silicon Valley Blogger October 7, 2011 at 5:02 pm

I’m sure that most of us must have our proprietary ways of keeping ourselves organized, and this is just one other way to make sure we keep tabs on projects, goals and activities. I remember how I had to adhere to this thing called MS Project when I was juggling multiple projects at work. There’s overhead in applying this method at home though, but it’s a keen idea anyway.

Steve October 8, 2011 at 7:58 am

I agree. A financial diary is a very good way to keep or understand the accounting of a company or an individual.

Her Every Cent Counts October 8, 2011 at 11:22 am

You are so organized! I’m too ADD to keep a financial diary (I tried that with calories as well, it hasn’t worked yet) but, at the least, I have all my expenses tracked through Mint so I can kick myself when I spend too much money on something or multiple items.

I’d love to sit down with you at some point for some tips from your wisdom… can’t wait for our NorCal PF blogger meetup. I’m still in awe of all of you bloggers that actually make income from blogging. I mean, I shouldn’t be surprised, I was a professional blogger writing about business stuff, and clearly that was a real job within a real company focused on nothing but blogging, but I can’t imagine making an income off of my blog! It’s pretty cool that many of you actually are able to do that. Perhaps it is because you have such wise advice to give. 🙂

Briana @ 20 & Engaged October 10, 2011 at 1:47 pm

This is a fantastic idea! I work much better when I give myself or get a grade in something. If it’s not an A, it needs to improve.

byron bay October 15, 2011 at 4:11 pm

Well yes I would be the last person on earth to say that one should not use a financial diary. But if one is going to be in business I think that financial management should be in the core of one’s personality. The old proverb of take care of the pennies and the pounds will take care of themselves should be drummed into children from a young age.

Shiraz October 16, 2011 at 8:06 am

I use a different approach. I keep a spreadsheet that I update monthly that monitors my net worth. Every month, as I’m filling out the various categories I can see why my net worth has either increased or decreased. Sometimes it will go down and I’ll see it was because of a tough month in the market. Other times it will be due to increased spending. I find this is a great way of keeping track of my financial status and a good way of adjusting my strategy to keep me on my financial plan.

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