Creating An Expense Tracker

I didn’t have it bad this summer but I definitely ate rice and beans more often than I would have liked. So when I arrived at my Mom’s house the other day I was appalled to find wasted, rotted food cluttering up the refridgerator. I threw away more food that first morning than I did all last year in my apartment at school. My mom is as stubborn as I am so I won’t be able to change her ways but if I am gonna teach my sister something this semester, it might as well be some financial literacy.

It started off with giving her a grocery receipt and telling her to track our expenses on a Google Doc. Then I decided that she should make the spreadsheet. She knows how to make charts but sometimes they are in a convoluted way, so it was good practice to make something simple and easy to follow. I then showed her how to enter an equation to sum the expenses for the week and asked her to enter equations that would sum the weekly totals into a cumulative total. Then I asked her what our weekly goal was. She didn’t believe me when I told her I wouldn’t tell her so we sat there for five minutes in a standoff until she gave up and went to ask my mom. Of course my mom has no concept of budgets and goals so she called our older brother (no luck) and dad who said he’d email over some data later in the day.

Then came another standoff – she wanted me to give her more information and I refused.

“Come on, where would you look if nobody you knew had the answer?”

“umm … the internet?”

“Yes!”

Her Google search led to Yahoo answers and she wrote down notes. There were three people that said they spent $90, $100, and $125 a week on food for their family of 3.

“Do you think that is a good goal for us? How might our family be different then these people?”

“Well, we don’t eat junk food and we make our own snacks and that is cheaper.”

“Really, you think that is cheaper? Lets go to the grocery store and find out.”

So we were off to the grocery store to compare prices on making your own snacks vs. buying packaged snacks and organic vs. non organic. I had to point her in the right direction by asking questions to get her to realize that it wouldn’t be good data if we compared a pound of organic chicken breast to 1.31 pounds of non-organic chicken breast but she came up with the idea to find out what normal people bought for eggs and milk by standing off to the side and observing. I tried to get her to take as much data as possible, but she didn’t really understand why and I wouldn’t tell her because I wanted her to make the mistake of not having enough data to make a solid conclusion.

We arrived back home and I taught her how to calculate percentages and what they mean and then she calculated the percentages of the price of what other people buy compared to us. It turned out that we pay 10% more for organic chicken breast, 40% more for thick oatmeal bread and 12% less for snacks.

“What can we conclude from our first set of data?” (I had the numbers 90, 100 and 125 written on a whiteboard in front of her)

“That a normal family of 3 spends between $90 and $125 per week.”

“And what can we conclude from the second set?” (I had the percentages 90, 60 and 112 written in front of her)

“That some things we spend more on but some things we spend less.”

“Can you make a guess at this point about our expenses over all?”

“Well, 2 out of 3 food groups we spend more on so we probably spend more than normal.”

“What can we do to be more sure?”

“Take more data?”

“Until then, what can we conclude if we combine both sets of data?”

This one took some time to get out of her but finally she said, “That we probably spend a little bit more than normal families.”

“Why?”

“Because the normal family spends between $90 and $125 and we spend more than the normal family.”

There were a lot of flaws. Her notes were messy, she didn’t take much data, we made a lot of assumptions and I did a lot of her thinking for her by asking her the right questions, but I’d say that is pretty damn good for her first real experiment. She did real research, real observations and came to appropriate conclusions. I picked up a bound journal for her to use to re-do the experiment. She is going to write a hypothesis, plan her observations in advance, do more research and take a lot more data. Then, we will agree on a good goal for our food budget based on the data and analysis and she’ll help me shop for food and help the family by keeping track of our expenses.

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