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I think the sayings "What gets measured, gets managed" is quite true....
Tracking our expenses and transactions
We have been quite rigorous in tracking our expenses and transactions since the first years of our marriage. We log our expenses up to the cents.
Right after we got married, we were quite carefree about spending our money, particularly for dining out and entertaining people. Then we realized that we couldn't account of the spending: it seemed that our money just vaporized into thin air, and the savings didn't grow as much as we wanted it to be. "It couldn't be!" I thought, "Where did the money go?" Realizing that something needed to be done about it, at the beginning, it was just me who took note of the expenses. But then I persuaded Indi about the benefit of doing so and he was willing to give it a try. After doing it for a few months, Indi too realized the great benefit of tracking. Now it has become a habit for both of us.
We didn't just stop at tracking our expenses. Once a week, I took the duty of consolidating all the expenses into spreadsheet, classifying the expenses into different categories. Once a month, both of us review our income and expenses. It rings true enough, "what gets measured, gets managed". The following are the benefits of tracking expenses:
And it didn't stop at having a massive record of expenses. Those spreadsheets are useless unless we take action on it. At first, we only took note of the expenses. The next step we knew which corner to cut. Furthermore, we began to set out monthly budget for the expenses. Finally now, we set savings target that we need to fulfil every month and cut the money for saving, first thing in the morning when the paycheck come (Think about the boat, the boat, the boat!).
It worked for us so we'd like to recommend that everyone do it. And it's not difficult at all, you'd only need a tiny notepad and pen in your pocket / handbag all the time and jot down the expenses as soon as it happens to you. Or, like Indi, who uses the pda that could sync the data with the computer easily. Or, like me, I use twitter and sometimes notepad (my pda sucks). It takes us only 5 seconds at the most, after each purchase.
Tracking my time
Having been used to tracking the expenses, these past couple of months I have been doing the experiment of tracking the time I spent doing things, to the details of five minutes. I realized that I needed to do this, in order to accurately allocate time for doing personal projects or do freelance work. Indi thinks I'm crazy of doing this, but I have my reason. Since Indi is an employee working 8 to 5, he is able to segregate time for his work and time for other things. As I am a full-time mother and part-time anything else, my time allocation is jumbled and mixed.
Before we have kids, I used to be able to focus on doing things for more than three hours straight, even without eating and drinking. Since I'm primarily an at-home-mother (and note, I hate that dicothomy of SAHM vs WM), I am often interrupted by the little ones. Now, I could rarely focus on doing things for more than two hours, which used to be the optimum way for me to be productive. Surely, I needed to change the way I work. But how? Again, "What gets measured, gets managed". The first step is to know how much time I spend doing things, of course.
Everyday, I track the time I take for doing things, primarily using pda-twitter and also using small notepad. Each tracking took me 5-10 seconds, and each day, on average, there are 16-18 different activities. So it doesn't take much of my time to track it. Once a week, I would consolidate the time spent into a spreadsheet and classifying it according to several categories (30 minutes per week). Once a month, I review them and this should allow me to decide what actions to be taken (30 minutes).
I found these interesting facts from two month of logs, one prior to Kei's birth, and one after:
Having logged my time in details enables me to decide what activities should I do less (aimlessly web-browsing), what activities should be made more efficient (household work), and what activities should be increased (spending time with kids, work, volunteer, romancing with Indi). How? Maybe I would try to elaborate more on this in the next blog post (depending on my time).