Oct 06

How to stop wasting money: keep a spending diary

Reading Time: 6 mins

Do you have too much month left at the end of the money? Do you ever check your bank balance and get a horrible surprise? If you ever have trouble keeping on top of your monthly budget, then it’s time to employ a simple strategic tool that can make all the difference: a spending diary.

It sounds too easy to work, but if you keep a diary of everything you spend, it will lift the lid on where your budgeting is going awry


How to keep a spending diary

Woman writing in diary/notebook

All you need to do is get a small notebook and a pen and make sure you have it with you wherever you go. If this seems too archaic, there are lots of very useful apps, including You Need A Budget, and Wally. They have lots of useful additional functionality too, so you can upload spending by photographing receipts, or view the locations where you tend to spend the most.

Whichever you use, you need to make sure you take note of every single thing you spend money on. Don’t forget about that coffee you picked up on your way to work or the late night online shopping. It’s these things that can really stack up and eat away at your income. Include bills, food, drink, travel, entertainment and any other luxuries. Try to keep it up for at least two weeks to get a good picture of your spending habits.

Seeing what you spend in black and white is a real eye-opener. Take this example:

Amanda earns £1,200 a month after tax. She pays £400 in rent, £70 on household bills, and £50 on groceries each month. So after those essentials she’s left with £680 each month, and somehow it just disappears and she can’t find the money to pay off her credit card. Let’s see her daily spending though.


Tube fare – £3.30

Coffee and cigarettes on the way to work – £12.50

Lunch at Itsu – £9

Copy of Grazia – £2.20

Post-work drinks – £14

Takeaway dinner – £12

Tube home – £2.80

Scratchcard – £5

Total – £60.80



Tube fare – £3.30

Coffee on the way to work – £2.50

Lunch at Pret – £7

Lunchtime shopping in Paperchase – £20

Tube home – £2.80

Top up supermarket shop – £35

Online film download – £14

Total – £84.60

That’s a perfect example of just how easy it is to spend almost £150 in just two days – and that’s two days without bills, rent, or anything more substantial than a top-up supermarket shop (when Amanda only actually went in for milk). If you find that your spending diary produces some similarly terrifying results, then now is the time to take action.

You can cut those costs without having to give up everything you enjoy – but remember if you have debts to pay then you have to prioritise them. That might mean cutting back for a while, but it’s a necessary evil.


How to fix the problem

Couple working out their financial situation

Unfortunately many of us are guilty of over-spending on necessities and having an unhealthy attitude towards luxuries. You don’t need to feel bad if you fall into this category – at some point in time all of us do.

But, in much the same way as a pledge to lose weight and keep it off, the answer isn’t to feel guilty about your bad habits, punish yourself in the short term and then go back to your old ways. The answer is to change your whole attitude for the better, for good. And the good news is, that isn’t as difficult as you might think.


do the easiest stuff first

Woman looking at an energy price comparison website

If you spend a huge chunk of your take-home pay on bills, it makes it difficult to split your disposable cash between the things you love. The first step is therefore to free up more of your cash for this disposable spending (and even some sensible things like saving too).

You need to be committed to getting the best possible deal on all the boring things. Even just switching your energy supplier can save you hundreds of pounds a year. See if you can get a better deal on your home insurance too, and don’t forget to save a sizeable chunk on your car insurance.

So many of us spend too much on our mobile contract, paying for more minutes and texts than we ever use. Make sure you get a better deal, with help from our comparison page.


Easy ways to spend less

Over 60s couple putting money in a piggy bank

Next, go through your expenses, and think of how you can achieve the same things by spending less – rather than having to give anything up.  It’s the big one we mention all the time – don’t buy your lunch for work, make it instead. Check out our tips for brilliant lunches to take to work.

Similarly, ask yourself what you’re trying to achieve by having takeaways. If you love curry and pizza, there are plenty of online fakeaway recipes (including fish and chips). If it’s the convenience you love, then the best solution is to devote an hour a week to batch cooking. Knock up a favourite like curry or chilli and then freeze them in portions for nights when you’re in a rush.

Look at your media consumption too. Plenty of us blindly carry on doing what we’ve always done, whether that’s paying for TV packages, downloading films, or buying albums online. The best approach is to look at what you actually use, and then consider alternative ways of paying for it.

When it comes to TV, for example, are you watching all the channels you are paying for? Could you get as much entertainment from streaming services that cost a fraction of the price? Are you downloading enough films to make signing up for streaming worthwhile? You don’t have to give up what you love if there’s a cheaper way to get it.

As for the lottery, the vast majority of us could achieve the same thing by throwing away the £5, so why not save it instead. If you want the rush of a potential win, try this free lottery – with the chance to win hundreds of pounds.

These are just a few examples, but you get the idea. You can pay less for the things you love.


get tough with yourself

Woman looking aggressive in boxing gloves

You can achieve an awful lot by getting smarter about spending, but often you need to get tougher too. Budgeting and living within your means is about prioritising the important stuff and cutting back on the rest. Rent, food and bills come first, followed by paying debt, and saving or long-term planning. Luxuries like after-work drinks, eating out, and clothes shopping should all be viewed as just that – luxuries. If you have money left after you’ve used it on the important things, then you can treat yourself.

If you find your resolve wavering, force yourself to think about the consequences. Perhaps you crave a lovely summer holiday, or you’ve been desperate for a new laptop. You can have all those things if stick to your spending plans.

Think how fantastic it would be to stop worrying about money, get rid of your debts and have cash left over each month.



If you think managing your money effectively is only for the professionals – think again. You can take control of your finances – it’s simple, straightforward and achievable with this guide.

Jasmine has teamed up with learndirect to create a great guide aimed at helping you get to grips with you money in just a few simple steps. And because we like to give you all the very best advice for free, you can download the guide right here and now, without paying a penny.

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belinda lockett
belinda lockett

I have been praying to be able to get control over my spending, I bring home about the same amount as indicated above and 900 to 1000 just disappears every month on unncessary uncontrolled spending. My plan for 2010 is to bank one check and save it and the first check make sure the rent and bills come out of that one and save the other minus 100.00 for necessities and I am going to do this with my first check on Jan 15th will update the site with my success hopefully I will be ab le to continue to… Read more »


Great stuff Belinda. You do that and do keep us updated on your progress. Quick tip – try to make it a game too. The shops and everyone else are trying to get you to spend – see how often you can beat them and not give them your hard-earned cash. Also, make the most of anything that’s free – that’s a great game too and you can have a lot of fun being creative.

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