Sometimes the truth can hurt
How to track your spending
You may think you’re only spending a certain number amount of money on your hobbies, groceries or whatever, but are you? Track your spending and you’ll know for sure. Here’s how:
- Commit to it — Before you get started, you need to commit to it. Because if you don’t, it won’t work. Tracking your spending can be an eye-opening experience, but it’s one that won’t work without the full cooperation of your family members. In other words, don’t do it halfheartedly. Remember, you have to want it.
- Keep receipts — You’re probably going to hate what I’m saying, but you really need to keep receipts for all of your purchases until you can get them marked down in your tracking log. This can be quite a hassle, especially if you’re not used to doing it. However, it’s an essential part of the process. Everyone needs to hand in any receipts that come in so they can be marked down. This was especially difficult for my husband…. but he’s got it down now and it really helps to know that there aren’t going to be any “mistakes” I log.
- Track your spending online — In addition to keeping track of all those receipts, you’ll also need to keep track of your online spending. This can include bills that are paid online, online shopping, and even credit- and debit-card transactions. The goal is to get a clear picture of all of your spending, so it’s important to include every single transaction you make during the entire 30 days.
- Add everything up — Once you’ve gathered your receipts and online transactions in one place, it’s time to tally them up. It’s important to mark what money was spent on when logging. This way when you look back you can see where your little leaks and landslide overspendings are happening. I have an online spending tracking that is easy to mark everything down in but I used to keep a paper copy where I had different highlight color for different types of expenditures which was really helpful for starting out. At the end of each month I would tally up each different color. It became a personal mission to make those columns shrink.
- Be honest with yourself — If you track your spending for the full 30 days and are shocked by the results, try not to make excuses for your behavior. Remember why you started tracking your expenses in the first place and try to learn something from it. If you don’t, you’re just resigning yourself to the life you’ve been living up to now. Remember that we can’t consistently do the same things and expect a different outcome. If you want better, plan for better and work for better.
Spending tracking is important for financial health because you can’t change what you don’t recognize. You can’t tackle a problem that you don’t even understand. If the goal is being thrifty and living within your means then spending tracking may be the single most important part of your journey. Because when you see your own spending on paper — in black and white — you can no longer blame the kids or your busy schedule. You can’t complain that you “just need a raise,” or point to high taxes, the government, or anything else as the source of your woes. And no amount of coupons can make up for money going out the door and not even knowing where it’s going.
We often create our own prison cells, either out of habit or because we fail to plan. And that’s why tracking your spending is a crucial piece of the puzzle: It forces you to come face to face with the biggest threat to your financial future.
It’s time to get POSITIVE! It’s time to get STARTED! And it’s time to get THRIFTY!
Do you track your spending? Has it change your life?