The road to financial independence is paved with HONESTY

This is what we use  to track EVERY GOSH DERN PENNY that enters and exits this house, physically or virtually, EVERY MONTH. This excel has been with us for the last three years. Writing down everything we spend was the first phase of our little project to see where our money was going and  to find out if it was really possible to live off one salary (while socking the other one away in savings). It was not possible, but we did come close by cutting a lot of the eating out column (beer was also included in that column, much cheaper to have happy hour at home!). Note: this sheet even counts coffee out of the machine and gelatos. No expense is too small to record. It may seem a little much, but if you want to do big things, you have to be drastic.

As you can see, the last column is what is left over at the end of the month. Sometimes it's in the negative (like when I have to pay my taxes) but it all averages out as the months go on.

It is a great way to be accountable for what you spend. I do not have a fancy cell phone (I lust for one. I am not made of stone, people!) but every time I look at this and see there's some money in the savings column, it reminds me of the big picture.

There's no better way to be honest with yourself and with your partner, than coming to terms with where that money is going (hopefully into your orange account, or, preferably somewhere you can get a little more interest).

You'll notice we do not have any credit card debt on this sheet. When I moved to Italy, I said good-bye to credit cards for good (paid them off with the money I got from selling my car). I paid off my student loans as fast as I could and now the only debt we have is our house (eight more years on our mortgage and that will be gone too). As a rule, we live simply and pay with what we've got.

ps I took out the numbers but I left in the comments just to show how we remember what we spent money on. We like to look back at last year at the same time and remember what we were up to. It also helps if you're looking to change phone companies, etc.