Mind Your Decisions

Track Your Money: Saving Advice From Rockefeller

The Advice

“Now let me leave this little word of counsel for you. Keep a little ledger, as I did. Write down in it what you receive, and do not be ashamed to write down what you pay away. See that you pay it away in such a manner that your father or mother may look over your book and see just what you did with your money. It will help you to save money, and that you ought to do.”

The Background

The advice comes from the richest American (according to Fortune), John D. Rockefeller.

The words were delivered almost 111 years ago to a group of young adults about how to save money and why to donate to charity. The speech is fascinating, and you can read much of it at the Rockefeller Archive Center.

Rockefeller explained that money alone makes you numb. He defines the poorest person in the world as one who only has money. Wealth is about purpose, he says, because “money is good if you know how to use it.”

Oh, and he practiced what he preached. Rockefeller kept an immaculate record of how he used his money. At one point in the talk, Rockefeller reads from his ledger about how he spent his money from over forty years before ($9.09 on clothing over six month, 35 cents to a teacher, and 10 cents one month to a foreign mission). Remember, this is what the richest guy in America chose to tell young people about saving and giving to charity.

Do you even remember where you spent money last week? Can you guess how much you spent last year within $100 or $1,000?

Introducing a Simple Modern Ledger

Starting a “ledger” is very simple and I offer one solution.

I present the Simple Expense Tracker for 2008 (Download in the Financial Tools).

It is a free spreadsheet that lets you keep track of your income, taxes, and purchases. The file works in Excel, Open Office, and Google Spreadsheets. The spreadsheet gives you a summary of how much you are saving and where your paycheck is going.

Here’s a sample of what the spreadsheet looks like with some data I made up (click image for larger preview):

I extend a special thank-you to long-time readers for their comments and suggestions. (If you’re using the 2007 file, now is the time to retire it and download the 2008 version.)

I’ve intentionally kept the spreadsheet simple for ease of use. But I’m always open to suggestions for new features so please feel free to email me with comments.

Other Options

I have been using the Simple Expense Tracker for several years now and find that it works for me. I spend a few minutes each day entering transactions and get all the detail I need. Plus, I can password protect the file and keep good security on my financial data.

But I understand there are many good ways you can keep track of spending. Readers have been sending me the ways they keep track of their money (money, quicken, mint.com, wesabe.com, etc.). These tools are more detailed and can even automatically update your data, but besides that convenience, I have not seen any thing that makes me want to move over from my system.

Get Started Now

I don’t want to dwell on the choices because any of them will be fine. It’s really more important to get started than worry if you are tracking the best way. I mean, Rockefeller did fine with a simple little paper notebook.

So get started now. I hear all sorts of excuses and the most common one is not wanting to start in the “middle” of things, like the mid-week, mid-month, or mid-paycheck cycle. But it’s not a real problem because spending habits tend to average out; the “middle” phobia is mind-boggling to me.

But if you have it, we’re at the start of a New Year. What are you waiting for?

One More Thing

If you have been enjoying my articles, please sign up for my free newsletter, which has exclusive content. I promise never to spam you or sell your email address.