Year 1998 - Track your income and expenses… and look at it!

My personal belief in how I was able to achieve a net worth of $500,000 before 30 was by being diligent and keeping track what I get and what I spend, and then periodically looking at this and evaluate how I am doing. 

I started tracking expense in just an Excel spreadsheet, and over time started using software like Microsoft Money, and now Quicken.   Overtime I started keeping a pretty detailed account of what I spent.  I keep every single receipt.  I use credit cards mostly and very little cash so I can download the statements directly.  Whenever I use cash, I try to update my records the night of.  For kicks, I also keep an inventory of my assets (aka home inventory).  Now, this might be considered by some as overkill (and some might think I just have too much time on my hands, but I just call it detail orientated :P).  The net though is writing things down (and reflecting on it) is one of the tricks that seem to have worked for me to keep me honest and accountable, not just in finances.

In the beginning, it was tough as I sometimes forget to write down a few things, but now it is just second nature to every so often, update Quicken with what I spent, then periodically, look for where I am bleeding the most and get a plan in place to stop the bleeding.