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Ever wonder why some people seem to have everything under control financially, while others are constantly stressed about money? The secret often lies in one simple habit—money journaling. This tool is not just about tracking expenses; it’s about transforming your relationship with money. And the best part? It’s something anyone can do, regardless of where you’re starting from!
According to John S. Rhodes of the Rhodes Brothers, “Money journaling is about awareness, not judgment. It’s a tool to help you understand your money, not fear it.” That quote perfectly sums up the power of this practice. By simply writing things down, you can gain clarity, break bad habits, and build a healthier financial future.
In this post, we’ll dive deep into money journaling: what it is, why it works, and how you can start today. Whether you’re a beginner or looking to level up your financial game, this guide will show you how to use money journaling as a strategy to take control of your finances once and for all.
TL;DR
- What is money journaling? It’s the process of tracking your financial habits, thoughts, and goals in a journal for better money management.
- Why is it effective? It creates awareness of your spending and saving patterns, helping you make informed decisions.
- Getting started is simple: Start by journaling how you feel about money, and then track your daily spending.
- Include specific goals, reflect on them weekly, and adjust your spending to align with your priorities.
- Avoid common mistakes like skipping entries or neglecting reflection.
- Use tools like budgeting apps or spreadsheets to streamline the process.
What is Money Journaling?
Money journaling is more than just jotting down expenses. It’s a holistic approach to understanding your financial life. Through consistent journaling, you can uncover patterns, emotions, and habits around money that you may not have even realized were there.
Think of it as a combination of budgeting and self-reflection. You’re not just tracking numbers; you’re tracking thoughts, fears, and goals. It’s a mindful approach that can help you shift from feeling anxious about money to feeling empowered.
Why Money Journaling Works
You’ve probably heard of the saying, “What gets measured, gets managed.” This is especially true with money. When you start tracking your finances in a journal, you increase your awareness of where your money is going, and awareness is the first step to change.
Step-by-Step Guide: How to Start Money Journaling
Money journaling can feel like a big commitment at first, but when broken down into actionable steps, it becomes not just manageable, but also empowering. Whether you’re starting from scratch or refining your financial habits, following these steps will help you take control of your financial life.
- Choose Your Method
There’s no one-size-fits-all approach to money journaling. The best method is one that fits your lifestyle and feels natural for you to maintain. Here are three popular ways to journal about money:
- Pen and Paper: If you enjoy the tactile experience of writing, a physical notebook can help you stay engaged. The act of writing can make the process feel more personal and reflective. Plus, you can easily add sketches or notes in the margins. Many people find that physically writing things down helps them remember and internalize the information better. Pro tip: Use a notebook that’s portable so you can jot down expenses and reflections as they happen. You could also use different colored pens or highlighters to categorize your spending (e.g., blue for needs, red for wants).
- Apps: For those who prefer a more automated approach, money journaling can be done digitally using apps like YNAB (You Need a Budget) or Mint. These apps automatically track your expenses, categorize them, and even help you set up a budget. They sync with your bank accounts, so you don’t have to manually input every transaction. Apps can be especially useful if you’re on the go and want real-time updates on your finances. Pro tip: Many apps allow you to set up alerts or notifications when you’re approaching your budget for specific categories, which can prevent overspending.
- Spreadsheets: If you’re a fan of visualizing data and prefer a more hands-on digital method, tools like Google Sheets or Excel can be incredibly powerful. You can build out custom templates, create graphs, and analyze trends over time. Spreadsheets offer flexibility, allowing you to track spending, income, and goals in one place. Pro tip: Use ready-made templates available online or create your own system. You can set up formulas to automatically calculate totals, averages, and progress toward financial goals.
The key is to choose a system that feels sustainable. If you like to write, go with a notebook. If you’re tech-savvy, apps or spreadsheets might be your best bet. The goal is consistency, so pick something you’ll actually use.
- Start with Your Mindset
Before diving into the numbers, it’s important to reflect on your relationship with money. Money isn’t just about dollars and cents. It’s deeply tied to our emotions, upbringing, and experiences. Journaling about your feelings toward money can provide valuable insights into your spending habits and financial decisions.
Here are a few prompts to get you started:
- What are your earliest memories of money? Did your family openly discuss finances, or was money a taboo topic? Understanding how money was viewed in your household growing up can help you identify subconscious beliefs that may be influencing your behavior today.
- What are your current fears or anxieties around money? Are you worried about debt, saving enough, or making a big financial mistake? Identifying these fears is the first step toward addressing them.
- What financial goals do you have? Whether it’s saving for a house, paying off debt, or simply feeling more in control of your finances, writing down your goals gives you something concrete to work toward.
By acknowledging how you feel about money, you’ll start to see the emotional triggers that may lead to overspending or avoidance. As John S. Rhodes says, “Money journaling is about awareness, not judgment.” In other words, don’t beat yourself up about past financial mistakes—use them as learning opportunities.
- Track Your Daily Spending
Now it’s time to get into the nitty-gritty of money journaling: tracking your spending. This is where the real magic happens because it gives you visibility into your financial life.
For one week, write down every single transaction. Yes, even the small stuff. That $5 coffee may seem insignificant, but over time, those little purchases add up. By tracking everything, you’ll start to notice patterns that you may not have been aware of before.
Some examples of what to track:
- Daily coffee purchases or snacks on the go
- Groceries for the week
- Subscription services (Netflix, Spotify, etc.)
- Transportation costs (gas, public transit, Uber)
- Impulse buys (online shopping, takeout)
In addition to logging the amount and category (e.g., groceries, dining out, entertainment), note whether each purchase was a “need” or a “want.” This simple reflection encourages you to think critically about your spending habits. Over time, you may be shocked by how much of your spending falls into the “want” category.
Pro tip: If you’re using an app, most will automatically categorize your spending for you, but make sure to review these categories to ensure they align with your actual priorities.
- Set Financial Goals
Now that you have data on your spending habits, it’s time to set some financial goals. Specific, measurable goals give you something to work toward and help you stay motivated.
Here are a few examples of short-term and long-term goals:
- Short-term goal: “I will save $500 in the next two months.” This could involve cutting back on discretionary spending or finding ways to earn extra income.
- Long-term goal: “I will pay off $10,000 of student loan debt in two years.” Break this big goal down into smaller monthly targets so it feels more achievable.
When setting your goals, use the SMART framework:
- Specific: What exactly do you want to achieve?
- Measurable: How will you track your progress?
- Achievable: Is this goal realistic given your current financial situation?
- Relevant: Does this goal align with your larger financial priorities?
- Time-bound: When do you want to achieve this goal?
Pro tip: Write your goals down in your money journal and review them regularly. This keeps them top of mind and helps you stay accountable.
- Weekly Review
At the end of each week, set aside 10-15 minutes for a weekly review. This is a crucial step that often gets overlooked, but it’s where the real growth happens. Reflection allows you to see what’s working, what’s not, and where adjustments need to be made.
During your review, ask yourself:
- Did I stick to my budget? Compare your actual spending with your planned spending. If you went over budget in certain areas, figure out why.
- What surprised me about my spending? Maybe you didn’t realize how much you were spending on takeout or entertainment. Identifying these surprises can help you make more intentional choices in the future.
- How did my spending align with my goals? If you have a savings goal but notice that a large chunk of your income is going toward non-essentials, it’s time to reassess your priorities.
This process isn’t about beating yourself up. As John S. Rhodes wisely says, “Money journaling is about progress, not perfection.” The goal is to learn from your mistakes and make small improvements over time.
Pro tip: Incorporate a “win of the week” into your review. Celebrate any small victories, like sticking to your grocery budget or making an extra payment on your credit card. Celebrating wins, no matter how small, keeps you motivated.
By following these steps, you’ll not only gain a clearer understanding of your financial habits but also create a practical roadmap for achieving your financial goals. Whether you’re trying to break bad spending habits or just want more control over your money, money journaling is a powerful tool that can transform your financial life.
Actionable Steps to Start Money Journaling
Whether you’re just starting your financial journey, trying to improve your money habits, or even looking to fine-tune your approach as a seasoned pro, money journaling is a practical and powerful tool. Below, I’ll break down step-by-step strategies for different demographics and experience levels, so you can start using money journaling effectively, no matter where you are in your financial journey.
For Beginners: Just Getting Started
If you’re new to money journaling, it’s important to keep things simple. You don’t need a fancy system or expensive tools. Begin by getting a dedicated space to track your finances. This could be a basic notebook or an easy-to-use app like Mint or PocketGuard—both of which are intuitive and great for beginners. The goal here is simply to get into the habit of recording your financial activities.
Start by tracking your daily expenses. For one week, write down every single purchase you make, whether it’s a $2 coffee or your monthly rent. Don’t worry about categorizing things perfectly right away—just focus on creating the habit of tracking. The key is to build awareness of where your money is going without passing judgment on your spending at this initial stage.
At the end of the week, take about 10 minutes to review your entries. Look for patterns or surprises. Maybe you’ll notice how much you’re spending on takeout or entertainment. Ask yourself whether your spending aligns with your financial priorities. As a beginner, it’s crucial to establish a rhythm of regular reflection. After reviewing, set yourself one simple goal. This could be as straightforward as saving an extra $20 a week or cutting back on impulse purchases. Track your progress over the next week, and when you hit your goal, celebrate that small victory. It’s these gradual steps that will help you build positive financial habits over time.
For Millennials: Managing Debt and Saving for the Future
Many millennials are balancing student loan debt, saving for big purchases like a first home or car, and trying to prepare for the future. Money journaling can be especially helpful in managing these multiple financial goals. To start, choose a digital tool that allows you to track both your spending and your debt payments. Apps like YNAB (You Need A Budget) or Goodbudget can sync with your bank accounts and help you categorize spending, which is useful when you’re juggling different financial responsibilities.
Begin by tracking your fixed expenses—things like rent, utilities, and loan payments. These are non-negotiable and need to be accounted for first in your journal. Once you’ve established what’s left over after these payments, journal about your discretionary spending (e.g., eating out, entertainment, shopping). This will give you a clear picture of where you can cut back and allocate more toward paying down debt or saving.
Millennials should also use their money journal to set financial goals with timelines. For example, if you want to pay off $5,000 of student loan debt in a year, break that goal down into monthly or even weekly targets. Write this goal down in your journal and track your progress every month. At the same time, set aside a portion of your income for emergency savings or future goals like buying a home. Journaling about both your present expenses and future goals helps you stay focused and motivated.
For Families: Budgeting and Saving for the Long Term
Families often have more complex financial needs, from managing household expenses to saving for kids’ college education or planning for retirement. For families, money journaling can be an essential tool for staying organized and making sure that every dollar has a purpose. Start by creating a monthly budget in your journal. List out all your fixed household expenses—mortgage payments, groceries, utilities, insurance—and compare them to your income. This will give you a clear picture of how much is left for discretionary spending and savings.
Use your journal to track weekly spending for things like groceries, transportation, and family activities. Once a week, review your journal with your partner or spouse to ensure you’re both on the same page financially. Discuss where you can cut back or allocate more toward savings, and set family financial goals together. You might want to save for a vacation, build an emergency fund, or contribute to a college savings plan. Writing these goals down in your journal and tracking your progress as a family helps create accountability and keeps everyone involved.
Additionally, families should use a money journal to plan for long-term financial needs. This might include saving for retirement through 401(k) contributions or setting up a 529 plan for children’s education. By writing down your savings goals and checking in on them regularly, you can ensure that your family is on track to meet both short- and long-term financial objectives.
For Entrepreneurs: Managing Business and Personal Finances
Entrepreneurs often face the challenge of managing both personal and business finances, and money journaling can be a powerful tool to keep everything organized. The first step is to separate personal and business finances. In your money journal, keep two distinct sections: one for personal expenses and another for business-related costs. This will help you track where every dollar is going and avoid the confusion of mixing the two.
For your business, use your journal to track income, expenses, and cash flow. Every time you make a business purchase or receive income from a client, log it in your journal. This will help you stay on top of your business’s financial health and identify areas where you might need to cut costs or invest more. Additionally, use your journal to set business financial goals. Whether it’s saving for new equipment, marketing, or expanding your team, writing down these goals and tracking your progress will keep you focused on growth.
On the personal side, track your individual spending and saving goals as you would in a personal journal. Entrepreneurs often reinvest most of their income back into the business, so it’s important to ensure that you’re also putting aside money for personal savings, emergency funds, and retirement. Use your journal to review how much personal income you’re allocating to savings each month and adjust accordingly.
No matter where you are in your financial journey, money journaling can be adapted to fit your unique situation. By breaking down your financial activities, setting clear goals, and reflecting on your progress, you’ll gain the clarity and control necessary to achieve financial success.
Common Mistakes to Avoid in Money Journaling
While money journaling is a powerful tool for managing your finances, there are a few common pitfalls that can hinder your progress. Being aware of these mistakes will help you get the most out of the practice and ensure that your journaling leads to meaningful financial improvements.
Skipping Entries
One of the biggest challenges of money journaling is staying consistent. It’s easy to let a few days slip by without recording your expenses or reflecting on your goals. Life gets busy, and it can feel like small purchases aren’t worth tracking, but this is where the real value of money journaling comes into play. Consistency is key. Every entry, no matter how small, adds up to create a complete picture of your financial habits.
If you skip entries, you miss out on essential data and lose the opportunity to identify patterns in your spending. Even if you miss a day or two, don’t let that discourage you from continuing. Get back on track as soon as possible. The goal isn’t perfection—it’s progress. To help maintain accountability, consider setting a daily reminder or scheduling a specific time each day to update your journal. You could also check in weekly to fill in any gaps or review any missing entries.
Focusing Only on Numbers
While it’s important to track your expenses and stay on top of the numbers, money is more than just math. Many people fall into the trap of focusing solely on the financial figures, such as how much they’re spending and saving, without considering the emotional aspect of their financial decisions. Money journaling is about more than tracking transactions—it’s about understanding the why behind your spending and saving behaviors.
For example, are there emotional triggers that lead to impulse purchases? Do certain expenses make you feel stressed, guilty, or anxious? Are there purchases that bring joy or align with your values? By reflecting on the emotional side of your financial decisions, you can gain deeper insights into your relationship with money and start to change unhealthy patterns. Include space in your journal to write about how you feel after certain purchases or how your financial habits align (or don’t align) with your long-term goals. Don’t just track the numbers—track your mindset.
Neglecting Your Goals
Setting financial goals is a crucial part of money journaling, but many people make the mistake of setting goals and then forgetting about them. It’s easy to write down a goal—whether it’s paying off debt, saving for a vacation, or building an emergency fund—but without regular check-ins, those goals can quickly fade into the background. This can lead to a lack of motivation and direction in your financial journey.
Make it a habit to review your goals regularly—at least weekly, but ideally daily. This will keep your objectives front and center and help you stay focused on what really matters. Use your journal not only to track your progress but also to reflect on how your daily spending aligns with those goals. For example, if one of your goals is to save $1,000 for an emergency fund, check in with yourself each week to see if your spending is supporting that goal. If you notice that you’re consistently overspending in certain areas, you can make adjustments to get back on track.
Additionally, break your larger financial goals down into smaller, actionable steps. Instead of just writing “save $1,000,” break it down into weekly or monthly savings targets. This makes your goals feel more achievable and allows you to celebrate small wins along the way, which can keep you motivated.
By avoiding these common mistakes—skipping entries, focusing only on numbers, and neglecting your goals—you can maximize the benefits of money journaling and create a powerful tool for improving your financial well-being.
Frequently Asked Questions
What’s the best way to start money journaling?
Start by tracking your thoughts and feelings about money, then move on to tracking daily spending.
How long should I keep a money journal?
Ideally, money journaling should become a long-term habit, but you’ll likely see results within a few weeks.
Do I need special tools for money journaling?
No, you can use a simple notebook, a spreadsheet, or free budgeting apps like Mint or YNAB.
Can money journaling help with debt?
Absolutely! By tracking your spending and seeing where your money goes, you can redirect funds toward paying off debt.
How often should I review my money journal?
A weekly review is ideal, but daily check-ins can also be helpful, especially when you’re starting out.
What should I do if I overspend?
Don’t panic! Reflect on why you overspent, adjust your budget, and try to learn from the experience.
How can I stay consistent with money journaling?
Set aside 5-10 minutes a day for journaling, and choose a reminder system that works for you (e.g., an app notification or a sticky note).
Can journaling help me save more money?
Yes! By tracking your spending, you become more intentional, which naturally leads to better saving habits.
What’s the best way to track financial goals?
Use SMART goals (specific, measurable, achievable, relevant, time-bound). For example, instead of “I want to save money,” say “I will save $1000 in the next 3 months.”
Is it okay to journal about other aspects of my life in the same journal?
Definitely! Money is deeply connected to other areas of life, so feel free to reflect on how your financial situation affects your mental health, relationships, and more.
Take Control of Your Finances with Money Journaling
Money journaling is a simple yet powerful tool that can transform the way you manage your finances. By consistently tracking your spending, reflecting on your financial habits, and regularly reviewing your goals, you can gain deeper insight into your money mindset and start making more intentional financial decisions. Key steps include choosing a method that works for you, staying consistent with your entries, considering both the numbers and your emotions, and keeping your financial goals front and center.
The journey to financial well-being starts with small, actionable steps. Whether you’re just getting started or looking to refine your money habits, begin today by tracking your expenses for a week—this simple action can reveal patterns you hadn’t noticed before and set you on the path to achieving your financial goals.
To stay informed and get more tips on managing your finances, be sure to check out and subscribe to the Rhodes Brothers YouTube Channel for the latest videos and resources to help you succeed.
Resource List
Books
- “Your Money or Your Life” by Vicki Robin and Joe Dominguez
A classic guide to transforming your relationship with money, this book emphasizes financial independence through mindful spending, saving, and tracking your finances.
- “The Total Money Makeover” by Dave Ramsey
A step-by-step guide to achieving financial freedom by paying off debt, building savings, and planning for the future. Ramsey’s approach includes practical journaling techniques to track your financial progress.
- “I Will Teach You to Be Rich” by Ramit Sethi
A modern, no-nonsense guide to managing money, Sethi covers automating finances, budgeting, and saving, all of which can be applied to a money journaling routine.
- “The Simple Path to Wealth” by JL Collins
Perfect for those starting their financial journey, this book walks through investment basics, wealth-building strategies, and how to track your progress through mindful money management.
- “Atomic Habits” by James Clear
This book is not just about money but about creating effective habits in all areas of life. It can help you build the discipline to consistently maintain your money journal and stick to your financial goals.
Blogs
A blog focused on financial independence and frugality, packed with tips on cutting expenses and tracking spending. Ideal for those using money journaling to build wealth.
A great resource for beginners, this blog offers personal finance advice, budgeting tips, and inspiration for keeping a money journal.
Focused on simple living and mindful spending, Frugalwoods provides stories and advice on how tracking your finances can lead to financial independence.
This blog focuses on personal finance with a fun twist, featuring real-life stories, budgeting tools, and tips on tracking expenses via journaling.
- Get Rich Slowly
- This blog aims to help readers achieve financial freedom through slow, steady progress. It offers plenty of strategies for tracking finances and staying motivated.
Podcasts
A well-known podcast that offers financial advice, particularly around budgeting, paying off debt, and tracking expenses to meet long-term financial goals.
Focused on financial independence, this podcast covers everything from frugality and budgeting to investing, all of which can be supported by money journaling.
- “Afford Anything” by Paula Pant
This podcast dives into financial independence, building wealth, and making mindful decisions about money—perfect for anyone trying to gain control of their finances through journaling.
- “The Money Nerds” by Whitney Hansen
A motivational podcast that covers topics like budgeting, student loans, and debt payoff, with actionable tips that can be logged in your money journal.
- “The Financial Independence Podcast” by The Mad Fientist
Focused on achieving financial independence, this podcast offers actionable strategies that you can implement and track in your money journal to accelerate your journey toward financial freedom.
Tools
- YNAB (You Need A Budget)
One of the most popular budgeting apps, YNAB teaches you how to prioritize your spending and stick to a budget. It’s perfect for those looking to automate parts of their money journal.
A free app that automatically tracks your expenses and categorizes them. Mint is excellent for beginners who want to start a money journal without the hassle of manual entry.
This app helps you track your spending by showing how much you have left after bills, goals, and necessities. It’s a great tool for daily money journaling.
A budget tracker that uses the envelope method, Goodbudget helps you stay on top of your spending and can be used alongside a physical money journal.
Created by Dave Ramsey, this app helps you budget every dollar of your income. It’s great for those seeking a structured way to track spending and plan for financial goals.
For those who prefer a custom approach, creating a spreadsheet in Google Sheets or Excel allows for full control over tracking and analyzing your finances. Ideal for those who like to visualize data and trends.
Courses
- “Financial Peace University” by Dave Ramsey
This course provides a step-by-step guide to managing money, eliminating debt, and building wealth. It includes strategies for tracking finances, which can be applied to your money journal.
A comprehensive course that covers everything from budgeting and saving to investing and retirement planning. It’s a great resource for anyone serious about improving their financial management.
By leveraging these resources, you can dive deeper into the world of money journaling and personal finance, taking control of your financial future with confidence.
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