Cash Tracking and Money Psychology
Just heard about Tweet What You Spend on the radio. While it’s not what I thought it was originally, it does address a real issue: cash tracking. (Granted, if you’re going to pull out your phone and open Twitter and then type in a note about what you’ve spent, it’s probably just as easy to use some sort of spreadsheet program or other customized budgeting app.) A staple of financial education, cash tracking helps people better understand their money habits. While a credit card will produce a list of purchases each month to answer the question, “How much did it cost?”, “Where did my money go?”, “What did I buy?” or “How did I spend my money?” that’s not the case with cash, which leaves no trail.
In terms of tracking, it’s no wonder the site is making the news right around New Year’s. After all, New Years resolutions generally involve behavior change in some form. Often it’s eating better, changing what one eats — or changing how much one spends, how one saves or what one spends money on. Just like dieting, it’s helpful to keep a diary of what one’s current habits are in order to know what can change and what that change would look like.
A tool that feels like a game, Money Habitudes also helps people better understand their habits and attitudes around money, giving people a more complete picture about their spending and saving. However, the powerful teaching tool also helps ask next-level questions like when, why and with whom? “Why did I spend that money?” “Who was I with when I bought that?” For example, cash tracking will probably show you that you spent an unexpected $15 on coffee last week. However, looking deeper might reveal that you spent that unnecessary money because you were in a rush, treated a friend or didn’t want to walk into a meeting without brand-name brew.