Armchair accounting

Great. Looks like somebody was able to gain access to one of my credit cards. A charge showed up from someplace in the UK! It's easy to tell on this one because I never use it (or pretty much any card except for the mileage thing). Called my card company and they've been terrific. No charges, account's on temporary hold, etc.

It's a lucky thing I happened to be checking my account the day after the charge went through. Over the last few years checking my spending and debt has become something of a minor hobby.

I came out of college & immediate post-college with ridiculous debt, though I know now it's a common thing and that my case wasn't nearly as bad as some people's. Still, when I finally tallied it all up it was a pretty frightening figure. I finally got my ass in gear in 2002 and set up a system. It's not anything earth-shattering -- it's just an Excel spreadsheet coupled with electronic bill payment. If you're grappling with bad post-college debt, you may want to give it a shot.

On one sheet I started recording how much and when payments were due. You can get the general idea of how much and when a bill's due over about 2-3 months of tracking. This helped me schedule regular billing dates to make sure that, if something bad happened, I could be sure the next paycheck would more than cover the next round of bills. This is easy for me because I get paid weekly. Might be tougher on monthly or bi-weekly.

Electronic bill payment helps because it keeps you on the schedule. If you still mail stuff in, you're bound to forget or lag far behind sometime and you'll be stuck with a double-payment or a compacted payment schedule one month that can throw the system out of whack.

After a while I was able to figure out when to hold back on spending, when to relax a bit, when it was okay to splurge, etc. It also helped me start saving up a bit too. I could start setting targets for saving up, start to stow stuff away for vacations, etc.

On the other sheet, and this idea came to me later, I started tracking principal on my debts. Cars, credit cards, student loans, everything. I could see how much it had gone down month over month and do projections based on that.

It's all really motivating because it gives you a really concrete sense of your progress. It turns it all into a kind of game -- just punch in some numbers and see how stuff turns out. It also motivates you to scheme a bit on how you can do better. You can see the impacts of, say, switching insurance companies, consolidating debts, etc.

There are probably better things and nice pieces of software out there that let you do this, but this has been working out really well for me. I'd often come out of months where there's been some kind of shock to the system from some unexpected expense with extra cash in the coffers from the things I do to compensate.