Piggybank

“People who live on budgets are happier people.”
~ Dale Carnegie (How to Stop Worrying and Start Living, p. 259)

When I was in high school, I often had a one-figure balance in my bank account. I didn’t think about it too much because I thought it was the norm for us students. We were meant to be broke. But had I clung onto this philosophy years later when I went to Japan for an exchange program, my financial worries probably would have developed into stomach ulcers.

I was going to live abroad, alone, which meant that I had to rent an apartment, afford the bills, buy food, pay for train tickets, and hopefully be left with some extra cash for having fun. I could have applied for a student loan, but it would’ve just been another excuse to spend more generously, and be left with empty pockets at the end. I had to change myself.


September 2007 finally came. And I was ready for the challenge.

Since day one I chose to record all my spendings. I would keep every receipt in my wallet, and then store it in a spreadsheet file. I would also display the budget for each week in that same document.

My weekly budget was ¥15,000 per week, and it covered all the money I had for a single week. I also kept a separate plan for static expenses, such as transportation, rent, electricity, and gas. The purpose was to know at the end of the week, exactly, how much money I had lef; and by doing so I would be able to avoid getting into trouble when the bills started sliding in.

Quick tips to keep a record of your spendings:

  • Use a spreadsheet program like Google Docs.
  • Keep all receipts in your wallet, and record them in your spreadsheet file at the end of the day.
  • For all transactions that don’t provide a physical receipt, temporarily store the costs in your cell phone, or use a small notepad or journal.

The plan worked. It worked even better than I expected. I ended up saving money every week. I noticed that if I tried hard enough, I would have more than half of my budget left after each week. And I felt totally elated to have that extra money that I could use when hanging out with friends on Friday night.

Thanks to the habit change, during my one-year exchange program I had no money problems whatsoever. Even though I wasn’t rich I knew exactly how much I had in my pocket every moment, and was thus able to control my spendings. It took some time for me to get used to writing down all the data on a daily basis, but when it became a habit I started enjoying it because it made me want to know how much money I would be able to save the following week.

Try it. And don’t forget to post your success stories.