(In the voice of Julie Andrews) Let’s start at the very beginning, a very good place to start. When you read you begin with ‘A B C’, when you sing you begin with ‘do re mi’…
so it’s fair to say that in that same mindset, when you begin to get your finances together TRACKING is a very good place to start. How can you budget or get a handle on your spending when you don’t know where every penny is going? I don’t care if you are debt-free, have a large retirement fund in a 401(k), or have a rich loved one who has promised you their riches when they pass away, if you are living paycheck to paycheck and have monthly bills that can’t be paid until your paycheck clears the bank, you need to start tracking where your money goes.
Untracked money has a way of growing wings 💸and flying away from your major priorities: electricity, food, and shelter to name a few. The whimsical purchases from Amazon, that pair of new scrubs, or Kwikstar snack purchases that felt harmless at the time seem a bit unnecessary in retrospect when the water bill can’t quite get paid on time due to insufficient funds. This is where tracking becomes your new best weapon in the fight for financial power and, ultimately, peace of mind. 💪 I want to show you how to start making better financial decisions through tracking!
What does tracking look like?
Tracking looks like writing down everything you spend whether you use cash, a credit or debit card, or a combination of them all. Some people prefer to carry a small notebook and pen with them or use a budgeting app. Some just type it into a Notebook page on their phone. Heck, mark it on your hand in pen until you get home. Key is to KEEP TRACK!!
If you aren’t a cash person, I recommend getting a handle through saving receipts and looking at your bank and credit card statements. Write down how much you spend on your housing, car payment, electricity, utilities, food, insurance, daily coffees, eating out, cell phone, entertainment, and on and on, not forgetting to include the automated services that secretly appear on your credit card like Netflix, gaming services, and Amazon Prime among the dozens of others that are so popular. This is your first step in getting your financial affairs in order.
Let me tell you from experience that this is the most grueling part that reaps little rewards up front but it is essential to knowing where your money is going so you can know how much to plan on when you do start budgeting. And as a bit of advice on your utilities that may vary from month to month: look up your previous months’ bills or call the company and find out what your numbers have been over the last year (or two if you’ve been at your residence for a while) and jot down those numbers so that you can find a happy balance when you eventually budget those numbers. Keep in mind that it’s better to have more information than what you may need than to have too little.
Why must I track my money when I have a rough idea of how much I spend?
Just as the VonTrapp Family Singers had to learn how to properly sing before they could perform, we have to learn what our spending habits are before we can begin to modify them. Whether our goal is to help make our futures more prosperous or, at the very least, less stressful and less debt-filled, this is a great starting point.
We may know that we are within our spending means because there’s money in the bank account at the end of the month. I learned the hard way that living within my paycheck doesn’t necessarily mean my money is working for me or going where I need it to go to secure my future. When you merely live paycheck to paycheck, you’re living on the verge of financial disaster if something bad should happen. I want to help you start building in knowledge so that you can break that cycle and not have to live in fear. Knowledge is indeed power.
This is also a good time as you are jotting down these expenses to start asking yourself if you really need that gym membership you never use or that home phone line that only telemarketers seem to ever use or even that costly satellite sitting in your yard that you rarely have time to take advantage of. Jot those things down when they cross your mind, but, most importantly, START TRACKING!! This is the beginning of greater things to come!! There’s great enlightenment to be achieved when you’re aware of where your money goes 💛
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Resources for online tracking include YNAB (month trial) and Every Dollar (free). I have used both of these with great results!