Ten years ago I was a jobless student in Osaka. I was almost broke but I still wanted to go to Japanese-Korean BBQ joints and bars, so I had to come up with a solution to give myself personal allowances on a consistent basis.

I set up an Excel spreadsheet where I had cells for each day of the month that would be filled with daily subtotals. I also wanted to set up weekly budgets (mostly because I needed the extra money for weekend parties) so I appended a column that automatically calculated and showed the amount of money I had saved, or exceeded, relative to the weekly budget. I figured the most realistic way would be to start tracking every single expense because then I’d know exactly how much I was spending, and I could more accurately predict the weekly results.

I stuck with the daily expense logging practice and it made me stop worrying about “unexpectedly” running out of money in the middle of the month. I knew exactly how much I was spending and how much more I could still spend while saving a little extra for the weekend. And the more familiar I got with my new spending habits, the more I wanted to see the values increase in the saving column. I actually ended up saving more than what I needed for the parties.

Now that I have a job I don’t necessarily have to take such drastic measures to survive on a week-to-week basis, but when it comes to saving money, the same budgeting principles apply.

“What gets measured gets managed.” ~ Peter Drucker

When I started working full-time, I noticed that even though I was earning more money each month compared to when I was in college, I wasn’t fully satisfied with my balance at the end of the month and I knew I was spending money on bullshit. Sadly I’ll never truly know what it was because I have no record of it. Six months later I decided it was time I recreated my old spreadsheets from my college days. And sure enough, the simple method of saving and recording every coffee, meal, and random electronic gadget receipt reconditioned me into a more conscious spender. Also, the burdening acknowledgement, that I needed to process the receipts when I got home, was a nice kick in the butt which helped me to control my wallet.

After two years of punching values into spreadsheet files I thought I should invest some time in simplifying and scaling the whole tracking process. The spreadsheets were doing their job just fine, but I wanted to up my saving game by taking also the types of purchases into consideration. I wanted to know how much money I was spending on restaurants, gadgets, groceries, etc. And I wanted to know if I could reduce the costs just by knowing how much I was spending on those things.

So I built a simple web application called PennyClerk that would allow me to log salaries and expenses. The application would then use this data to show me the results in a more readable format using lists and simple graphs.

I also knew that my dad had been logging his and my mom’s expenses on paper so I thought I’d add support for free registrations in case anyone else wanted to try it out as well.

Now, you might be wondering, what about existing expense tracking services that pair with your bank account and automatically collect information about your transactions? While the concept sounds nice, it comes with a few drawbacks. Such services can only track credit or debit card purchases, so if you ever use hard cash your data will become incomplete and misrepresent your expenses. Also, the services are unable to automatically categorize expenses because they simply cannot determine the content of your purchases. This means that if you want to have an accurate record of expenses to-the-penny, your only option is to micromanage your data with spreadsheets or with a micromanagement application like PennyClerk.

In the case of PennyClerk, the whole tracking process revolves around the following workflow:

  1. Keep every physical and electronic receipt you receive over the course of a single day.
  2. At the end of the day, go through the receipts and store them into the application.
  3. Throw away (or archive) the receipts.

If you’re interested to give it a try, go ahead and create an account and let me know if I can help you with anything. PennyClerk is now also available as a mobile app on the App Store and Google Play.

PennyClerk