SINGAPORE - When I tell people about my habit of recording all my expenses, one question that pops up is: "You record how much you paid for your drink, too?"
Why bother, indeed? Drinks cost anywhere from around 80 cents to $1.50 at coffee-shops. They are almost necessities if you order a bowl of laksa or a heavy-going plate of char kway teow.
Yet the dollar that you would otherwise spend on a drink can't get you very far when you are shopping for a new shirt. And when looking at your expenses to see where you can cut them, you'd want to focus on the bigger ones first.
Surely, drinks are trivial expenses that aren't that important in the grand scheme of things - in the same category as, say, spending on the packet of tissues you use to chope your hawker centre table.
Small expenses add up, though.
The $5 latte you grab every morning can amount to more than $1,800 a year. Even the $1.20 you pay for a coffee-shop drink every weekday lunch, could add up to $300 over 50 weeks.
Yet there is little point in avoiding $1.20 drinks at the coffee shop just to save that little bit more if one ends up splurging $1,000 on a gadget one doesn't have much use for.
Where recording the small expenses as well as the big is useful, however, is in building up a discipline of evaluating every expense. Consider how several things have to happen in the process of recording an expense.
You notice or hear the sticker price and reach into your wallet or purse to get the money required. You might think of the price again when you check if you got the right change.
Then, you have to reach for a piece of paper or your phone, and try to recollect how much you paid for the item you bought - bringing the price to mind again. Then, you type the price in, or write it down, and see it yet one more time.
In the process of recording down an expense, how much you paid for an item appears in your consciousness at least three or four times before you finally put it away from your mind. These are powerful reinforcing signals that make you more keenly aware of costs.
Along the way, your brain has plenty of time to figure out whether you made the purchase at the right value or not.
If you keep at this exercise of tracking expenses, this internal thought process will kick in again and again every time you buy anything. The things you used to spend on unthinkingly will start to come into sharper focus.
Keep at this exercise for weeks, months or years, and chances are that you'd start questioning every purchase you make.
Is it at the right value? Did I overpay? Did I get it at a bargain? This ingrained thought process will help you make smarter spending decisions.
If you always hang out at a cafe that serves $8 coffee and then one day, tasted another one for $3 that was pretty good, there might be a bit of an inner wince when you next sit down at a place that serves a $8 cup.
If you are used to eating a delicious plate of chicken rice for $2.50 and a piece of fruit for $1, and saw a restaurant offer selling a package deal of chicken rice and fruit for $35, you might have second thoughts about whether you want to pay 10 times as much for the same item plus service, air-con and ambience. The money could very well be spent on something else.
The world most of us live in has fair markets and operates according to the rule of willing buyer, willing seller. From the consumer point of view: buyer beware.
Whoever has more information about how much things really cost will have an edge.
Expense recording is ultimately about information gathering. The more information you have, the better equipped you are to take charge of your spending decisions - and the less likely you will be that sucker.
And with smartphone applications to help you, recording any expense on an expenditure takes mere seconds, whether it is $1 or $100.
I used to, on and off, record my spending in a notebook. I then moved on to using the iPhone's note function to keep track of my weekly spending.
The process was still a chore. Every week, I would create a new note and type in Monday to Sunday. I'd forget to write things down one day, only to rack my brains several days later over what I ate for lunch and what I spent.
A year and a half ago, a friend told me about iSum, an application used to record her expenses. My interest in recording expenditure was revived.
The app is fuss-free: the moment I spend, I enter the amount, press a button, and a record is instantly created with the date and time stored.
Press another button, and I can type a short tag describing the expenditure. Every time I make an entry, a number is added to a running total that can be separated by week and month.
There are a few other free applications out there. In the US, where spending on credit cards is more common, a website called mint.com even automatically sorts out your credit card transactions for you.
Money management involves cultivating some habits. Get started by knowing exactly how much you spend a month - drinks included.