About two years ago, I started keeping really good records of all of my finances. Whenever I got money, or spent money, I recorded the transaction in this file, with an amount, a date, a note of how I paid (cash, credit/debit card), and fancy hierarchical tags – really thorough records. It worked for a couple weeks until I stopped doing it, because taking thirty seconds to figure out the exact right set of tags for a transaction is just really a pain.

About three weeks ago, I started keeping okay records of all my finances. Whenever I get money, or spend money, I record the amount, the date, and the general category (e.g. eat-out, groceries, income, rent). I’m having zero trouble keeping this going.

Here’s how the whole shebang works:

  • Whenever I spend money, I fire up a terminal next time it’s convenient, and type

      transaction 3.56 eat-out

    or

      transaction 123.45 income --note 'paycheck'

    or whatever. The amount I spent, the general category (e.g. “eat-out”, “groceries”, “rent”, “income”), the current date (or one I provide), and optionally a note; all those are recorded in a file. Here’s the script.

  • When I want to crunch some numbers, I open up a Mathematica notebook that loads up the data in that CSV file, and makes pretty plots and pie charts:

    categorization of my finances since January 18

It’s that easy! It is seriously that easy. And now I will be able to keep excellent track of where my money goes.

I think the moral of the story is for many X, if you know you’re likely to put too much work into X and then fail completely as a result, you should purposefully paint yourself into a corner so that you can’t put too much work into doing X.