Keeping an overview - a housekeeping book helps track spending

By Andreas Thieme Aug 25, 2011, 3:06 GMT

Berlin - A notebook, a pen and receipts for everything you spend is all you need to keep track of your household accounts.

'It's a good way of analysing your income and expenditure,' says Korina Doerr from the German Savings Banks Association in Berlin. Keeping accounts can help identify unwanted outgoings, which Doerr says are often underestimated.

An Excel spreadsheet is another useful way to keep on top of your household's accounts. But no matter what form it takes a household account book is an excellent method of keeping an overview of spending. Small outgoings often pass unnoticed. A magazine or a coffee-to-go can have an effect on your budget over the long run.

The single biggest expenditure for many people is owning a car. Payments for repairs, road tax and insurance are difficult to keep track of. Living costs and food bills often contain unnecessary items and expensive extras. 'There's a wide spectrum of expenditure when it comes to living and eating,' says Edda Castello from Hamburg's Consumer Protection Office. Household accounts will show you what your fixed costs are compared to your monthly budget.

It makes sense to keep an eye on your outgoings over a long period of time by documenting every financial transaction. 'You should keep a book for at least two or three months,' advises Castello. Doerr says it's very important to divide outgoings into categories like 'Food' or 'Clothing'.

Frank Lackmann from the Consumer Protection Office in North Rhine-Westphalia says there are plenty of household account books available online to download as a PDF document. Lackmann says keeping a close track on expenditure will make it clear what you are spending your money on. An analysis of your accounts will help you draw up a budget where future spending is in a balanced relationship to your income.

An electronic account book is another good way of itemising expenditure. There are several programs available online and mobile phone apps such as MoneyBook. 'They usually have preset categories and automatically do the math.'

Lackmann says you should choose an accounting method that costs nothing if possible. Freeware programs are useful for practicing with, according to Michael Huelsiggensen who works with an organization in Germany that represents companies working in the digital economy. 'But an electronic account book is only useful if you keep it up-to-date.' It's important to regularly enter your expenditure.

Depending on the provider, programs can contain different features and categories or can allow more than one person to update the data. Online based services should be avoided though. 'Never put private information online,' says Lackmann.