Why don’t people track expenses? [Poll results]

In March of this year, the National Foundation for Credit Counselling surveyed over 1,000 American adults to get a sense of financial literacy.

The results showed an alarming trend in personal finance. Compared to 2010, people had more reckless habits: “Americans are spending more, saving less, and still carrying credit card debt.”

Noteworthy to me is how poeple felt towards tracking their expenditures. As I have written about before, tracking expenses is important because money flows are complex, and even the richest American liked tracking expenses.

Still, Americans are not convinced enough to take action. The survey found that more than half (56%) of Americans do not budget and track their expenses.

So the question is, if tracking expenses is so important, why do so many people not do it?

Are Mind Your Decisions readers better than average?

It was easy for me to brush off these results. I chalked up the numbers to lack of financial education and lack of technical know-how.

I had a suspicion that educated people, and readers of this site who routinely solve hard math puzzles, would do much better. But I had to test that idea.

About a month ago I put up a poll question on this website, asking people whether they tracked their expenditures.

In all, 200+ people answered the poll, and I want to thank every one of you for participating.

Here are the results:

At first glance, the results are very reassuring.

Only a small percentage (24%) reported they never tracked their money expenses, and I admire their honesty.

And a fairly large group (29%) reported using a spreadsheet. I can only guess that this is partly due to the free expense spreadsheet made available on this site.

So I was happy about the results at first, but then I had to second guess myself.

A closer look at the statistics

The poll results seemed great, but I realized something else was going on.

I thought a bit more closely at the category of people who “sometimes” track their expenses (22%). If someone tracks their money only sometimes, what does that mean?

I suspected these people may only track holiday spending, or perhaps make a vacation budget and stick to it. Would they be able to answer how much they saved in a year? Could they say how much they spent on restaurants? I suspect people who only “sometimes” track expenses could not. And ultimately that means these people do not track expenses systematically, and therefore their answer is really closer to a “no.”

So if we add up the “never” and “sometimes” answers, the poll shows that 46 percent of respondents on this site do not systematically track their expenses. That’s better than the national average of 56 percent, but it is still a large group.

In other words, based on this non-scientific survey, even the highly educated people who visit this site are not always tracking their money that much differently than the average American.

So why don’t you track expenses?

Now before drawing any wild conclusions, I do wish to clarify a point. I am not one to judge and say that everyone must track their expenses. It’s something I find easy and beneficial.

But there are people who make the case that it’s not necessary. If you make a lot of money (say over $150k), and follow frugal habits, you are less concerned with the piddling sums spent on movies, restaurants, and lattes.

Still, I think the survey points out that it’s not education or financial literacy that prevents people from tracking expenses.

I suspect a lot of people do not think they need to track expenses, and others have trouble with motivation. Others could fear the results–it is scary to see where money actually goes some times.

Rather than speculating more, I wish to turn the discussion to you. I am really curious why people do not track expenses.

Please take a moment to indulge me with your reasons, or reasons why your friends do not track money, in the comment section. I am open minded and definitely want to learn more about this.

And if you are interested in tracking expenses, I invite you to try out my simple expense spreadsheet that automatically summarizes spending and helps you keep a budget.



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  • http://mathsetc1618.blogspot.com Gareth

    I personally fall into the sometime category.

    When I am running out of money, I am very quick to build up a report of what I’ve spent where and why. However, when my weekly income equals my weekly spending or is greater than it, I’m not interested in knowing where my money is going. I check my balance maybe once or twice a week.If my weekly income is substantially higher than my expenditure, then I will transfer funds to saving.

    Why do I do it this way….good question. I want money to simply be a tool, yet the logical deduction from that statement is to use it effectively which would imply monitoring it. I have definitely not thought about it enough, although I have been taught it throughout my life. I think I simply dislike the idea of allowing a budget to dictate my actions.

    At the same time, I probably have not spent enough time actually thinking about whether I should or shouldn’t set up budgets. I have been thinking lately that I need to start monitoring my finances a little more carefully, so maybe this will be a good idea.

    A final note – I quite enjoy over analysing. Thus setting up a budget and tracking my expenditure and income inevitably leads to an examination of how much of my tax refund is refunded after it’s been taxed….

  • Alex

    I do not track my expenses to a T but I check my bank account every other day and generally judge how much I have to play on. Any more budgeting is not necessary for me because I’m single, living in a little apartment and know how to live off of a little bit of money. It’s only in emergency times that I budget to the T.

  • http://www.jamus.name Jamus

    I do not track my expenses. I have not done so since high school, when I did, perhaps too religiously, on now-antiquated expense tracking software. The reason I stopped was simple: opportunity cost. Or perhaps more precisely, net opportunity cost. Sure, it doesn’t take much time these days to enter expense information, with smartphone apps, automatic data downloads from financial institutions, and web-based interfaces. So the marginal cost of tracking expenses is very low. But the marginal benefits are, for me at least, even lower: the times when the disaggregated expense information led me to alter my spending behavior are few and far between. So, for me, there is little reason to maintain such data. This is further corroborated by the fact that almost all my expenses are channeled through my credit card, and other than a quick check for potentially unauthorized transactions (which more often than not the bank picks up before I do anyway), I do not ask myself how my expense patterns can be altered (my spending decision, after all, occurs at the margin, at the point of sale).

    What I do do, in terms of understanding my spending, is ask myself—when I see my credit card bill—whether an anomalous total spending amount can be justified (so if my spending that month turned out to be higher than average, was the extra spending justified by a holiday, a large gift, an unexpected repair, or an indulgent luxury?) Only in the final case would I use the information to change my subsequent spending behavior (and again only if, ex post, I regret the choice).

    By the way, this doesn’t seem to be affected all that much by income, either. I did not track expenses through grad school, when I was on a TA salary of 1,200 bucks. And through all my income levels, I have managed to save a reasonable fraction of my income (which given that I anticipated future income rises, somewhat violates life cycle saving theory, but that is another story).

  • Eyal

    Jamus’ answer is on target. In college when I had very little money, I tracked expenses just to get the idea of where everything is going, and party just being pedantic. Now that I’m making lots of money and time is precious, I can’t be bothered. I have a record of my bank account over the last 7 years and I look at the general trend to see how much a salary increase or change in rent affects me.

    I liken it to dieting. Some people have naturally small appetites and are skinny. They don’t need to count calories. Fat people with big appetites need to count calories.

  • Jennifer

    I’ll be the oddball. I track every penny, I find it comforting to know where the money goes. I’m also odd because I find that the more money I make, the more I want to know where it’s going to be sure I am maximizing my savings. It really doesn’t take me long – maybe 15 minutes a week.

    My grandparents grew up in the depression and then lived on one small income for their entire working lives. We didn’t find out how much money they had saved until they passed away. They were quite wealthy.

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