First, my income is mostly a straight line with a tiny incline once a year (most years). I don’t get spikes here. It doesn’t go up and down. There is nothing exciting or interesting about that line.

Second, my spending is all over the place. There are certain large expenditures (and very large expenditures) that pop up infrequently such as car insurance and vacations. Also, I pay cash when I buy a car. It has no correlation whatsoever to my income.

So, some months I look like a miser and some months I am spending way more than I earned (though not more than I’ve saved). So I like to add a line that’s the average of my last 12 months of spending so I can get a better handle on how my spending really does compare to my income.

I agree with Trent that it’s important to include the data points you’re disappointed with. Later, when you’re doing well, or even mediocre, it will show you how far you’ve come.

For those paying off debt, you might want to chart that, too. When I first bought my house I was making extra payments each month. I quite enjoyed plotting the line of how much I still owed and also plotting the line of how much I would be owing if I had just paid the minimum. Even when your numbers are huge and depressing, seeing that gigantic gap is very motivating. If you’re doing the debt snowball, you could make this easy by just plotting the numbers for the debt you’re throwing extra money at.

It really does take intensity and a great sense of purpose to make serious progress on debt.

We have a long way to go – but due to small successes, I can taste the day that I will be able to walk away from my job, if I want to, because I don’t have any payments.

~Oswegan
http://oswegan.blogspot.com

Despite the record keeping, I was still deeply in debt. I looked at the numbers, but I didn’t really LOOK at the numbers. Somehow I thought that I was okay because I knew what was going on, but I didn’t take action. Now I’m tracking the numbers with a purpose in mind- to get out of debt. Now I feel the pain when I see the expense number go above the income.

I previously discussed about this topic and also give some suggestions to avoid the sudden dip in the income line.

The book uses very simple examples, which are easy to follow and practically tailor made for a spreadsheet. But with a 401k, a HCSA, a 529, etc… it’s more work than I’d like to track everything.

I use quicken for these charts. It’s less work that way, but big expenses (like taxes!) add noise to the system. (I suppose I could set up quicken to fund a “taxes” account monthly so the cost would be spread out over the year, but that’s too complicated for me.)

(Not that I’m a shill for quicken, I’d happily use moneydance if it had all the features I need.)

~Oswegan
http://oswegan.blogspot.com