Building a Budget after College with a Financial Diary

Now that you're out of college, student loans are coming due, and so are so many other bills: rent, electricity, water and sewage, phone and Internet, and the list seems to go on. Whether you're still in shock over what your expenses actually are or you feel you have everything completely under control, logging all your expenses into a financial diary never hurt anyone — and it could help you in many ways.

If you find that you're spending more than you have, even though you don't think you've overspent in any areas, you could have a lifestyle-to-income gap in which the fancy dinners and weekend shopping you think of as "normal" are more than you can really afford.

The best way to find out if what you think you're spending is what you're actually spending is to compare your actual expenses to the expenses you expect to have every month. To do that, you need to keep track of exactly what you're spending for a month. But before you begin your month of keeping a financial diary, write down your best guesses of your current spending.

Pick your logging method for your financial diary

The first step in creating a financial diary is to decide how you're going to keep track of your daily expenses. Your options include the following:

  • Phone: If you're a texting wiz, plug the numbers into memos on your cell phone and e-mail them to yourself every day.
  • Memo pad: Get a small memo pad you can keep in your pocket, briefcase, or purse.
  • Journal: Pick an attractive journal - or just a plain, spiral-bound notebook - that you'll want to bring with you wherever you go to write down your expenses as you incur them.
  • Keep daily receipts in a pocket or wallet: At the end of each day, add up all of the receipts and write down what you spent.

Categorize your expenses

How organized you are when you log your daily expenses is up to you. You can incorporate categories into your daily recordkeeping, or you can just write everything down and save the categorizing for your monthly budget.

You need to have clear definitions of what you consider to fall into a specific category. Otherwise, you won't be able to keep track of differences in your expected, actual, and desired budgets accurately. The following are most of the categories that people spend their money on. Some might not apply to you, and others might need to be added, but it should get you started off right:


Property tax

Homeowners'/Renters' insurance

Home maintenance

Home decor

Student loan payments

Credit card payments

Car payments

Car maintenance

Car insurance



Dining out




Medical costs

Health insurance


Gifts for others





Total your daily expenses in your monthly budget

At the end of the month, you want to pull all your daily recordkeeping together into a monthly budget. Create a worksheet that lists your spending categories on the left, and then insert, in columns to the right, what you expected to spend, what you actually spent, the difference between the two (if you spent more than you thought you should, this will be a negative number), and a "desired budget," that is, what you hope to bring your spending down to in each of those areas.

With these numbers in hand, you can easily see where your money is going, find out where you're spending too much, and focus on where your spending habits need the most refining.