It doesn’t matter if you are young, middle aged or retired, if you don’t track your spending, you are likely to worry about spending.

I often get asked for practical ways to track spending. In the days of EFTPOS, debit cards, visa cards etc, it can be hard to keep a handle on how much you are spending and where it all goes. 

This can get more complicated if you are running your own business; how to keep a clear distinction between drawings and personal spending.

And it turns out your grandma had it pretty close to being right. In the days of paper money, grandma had her jars in the kitchen for household costs – one for food, one for the mortgage, and one for bills.

After dealing with hundreds of clients and their various methods of budgeting, I still believe that this is the most effective way of budgeting for household expenses.

“Of course, time has moved on and we don’t get paid with cash in an envelope anymore, it simply appears in your bank account. These days there is a multitude of low cost, zero fee bank accounts that you can set up the same way as Grandma’s jars.”

For example, you could have three accounts: one for weekly costs such as food, petrol and entertainment; another for regular monthly bills such as power, phone and insurance, and one account for rates, clothes, medical bills, car maintenance and other ad hoc bills you need to plan for.

Applying these simple, yet important tips means you will have a better understanding of where your expenses are going. You’ll be able to adjust things in response to your family’s needs and ensure peace of mind when it comes to finances.

This approach seems to work, so maybe we should listen to Grandma’s advice more often…