Tracking Spending
I’m going to ask you to do an exercise. It’s not anything that is super physical, yet it may make you a little uncomfortable. Close your eyes wherever you are. If you’re listening to this while driving, do not close your eyes wait until you get to a safe place.
Ok, to those of us that are at home or in an office, close your eyes and keep your eyes closed during this exercise. Now your exercise is going to be thinking through how you are going to get to your car. Do you have to get up out of a chair and cross a room?
Maybe you have to walk downstairs? Do you have to open a drawer or a door to access where your keys are stored? Are they at the bottom of your purse or a backpack? Then how are you going to make it out of the house or office to get to your car? Do you have to step outside, cross a parking lot? Do you have to go down steps to a garage?
The simplest task, something that you likely do every day can feel like a huge challenge when our view is obstructed. Now open your eyes and think of going to your car with your eyes open and the lights on. That seems much less daunting doesn’t it?
Tracking our spending is the same way. When we don’t track our spending, we cannot make informed confident financial decisions. From where we want to go out to eat or how will a car repair be made. This leads to a lot of stress because we are living in a constant world of financial guesswork. There is no foundation for accurate information, no place to get started or know where to course correct.
When we track our spending, we become aware – it is like opening our eyes and turning on the light in a dark room. We know where every dollar is going and we can begin to control how that money is flowing though our lives. It also helps us to make confident and informed decisions about where we are headed.
You may think, ok, awesome. I can easily pull up my bank or credit card statement and track my spending. This is the bank tracking your spending and the challenge with that is those purchase have already happened. This is not being intentional with your money. We need to be in the moment with how our money is flowing in and out.
You may be thinking, ok so how do I start tracking my spending? You can jot down purchased items on a piece of paper or a small notebook. Many of us have these things that you are watching me on right now. There are apps that can help you record your spending or even something as simple as making a note in the notes app on your phone. We have a spending record worksheet that is in the resource section that you may download. Every time you make a purchase, when you pay a bill and within a couple of weeks you will quickly discover where your money is going.
In upcoming videos, we will learn about how to enter this information into a budget. Our next video is an important one; it is on building a $1,000 emergency fund.