The mental list is unreliable
A taxi someone owes you for, dinner you covered, a deposit that should come back - these are easy to remember for a week and easy to lose after a month.
Money owed is still part of your position
Money owed to you is an asset even though it is not currently in your bank. Money you owe someone else is a liability even though your bank balance may still look healthy.
Write it down to remove the friction
Tracking the amount, person and partial repayments turns a vague social memory into simple admin. It is not about being transactional with friends; it is about keeping your financial picture accurate.
The same picture should contain both directions: what is owed to you and what you owe.
Want to apply the method to your own budget?
See the 1-to-1 budget setup session or start with the free spreadsheet.