Financial Management Tip Day 3: What are you currently spending?
Have you considered your current spending and spending habits?
Start today and track every dollar and cent that you receive and spend (in and out).
How do you develop a financial plan if you have no data to work with? How do you figure what to change without information?
Look at bank and credit card statements for any track-able spending.
Keep your receipts so if you need to look back you can!
Usable/easy to implement advice: Where do you start?
- Be specific
- Be honest (lying will only hurt you)
- Include enough information (dates, exact amounts, store, what you spent money on)
- Start with 1 month of information and expand it out to 2-3 months to get an average since your spending is probably not identical every month.
- Do not use the word miscellaneous- name it
- When completed, you need to examine the information you gathered and look for patterns in your spending. Ask key questions like….
- Who did you spend money on? *Did you spend extra money on the kids or pets this month?
- Why did you spend money? *Boredom or a reward
- When did you spend money? *On a lunch break, after work, weekends
- What was your mood? *Happy, sad, mad, fearful, bored
- What was going on in your life at that time? *Did you receive a job promotion or bonus? Did you lose your job? Marital fighting
- Did you need or want the item?
- Was it useful/used/consumed?
- Did you have another item that could of worked at home?
Sample (7 days): Sally recorded the in’s and out’s of her money for 1 week….let’s examine it more closely
Date / Amount / Store / What you bought
June 9th/ +$450.00 /pay cheque
June 9th/ -$55.50 / monthly cell phone bill
June 9th/ -$3.40 /local coffee shop /coffee and brownie
June 9th/ -$24.80/grocery store/ milk, eggs, bread, bananas, apples, cream cheese
June 9th/ -$7.90/drug store/magazine
June 10th/ -$40.00/gas station/gas
June 10th/ -$6.75/pizza/pizza for lunch
June 10th/-$75.00/vet bill for Fluffy
June 10th/-$17.90/grocery store/ fried chicken for supper
June 11th/-$21.49/walmart/kitty litter, birthday card, new shirt
June 11th/-$5.40/coffee shop/coffee and a treat
June 11th/-$9.80/book store/new book
June 12th/-$30.00/walmart/new toy for Johnny
June 12th/-$7.80/sandwich shop for lunch
June 12th/-$15.40/grocery store/supper (ground beef, spaghetti sauce, spaghetti, garlic bread)
June 13th/ -$80.50/car maintenance (oil change)
June 13th/ -$120.00/ costco/ toilet paper, laundry soap, steak, salad mix, box of oranges, multivitamins, box of cereal
June 13th/ -$33.50/movie theater/ movie tickets and concession treats
June 14th/ -$8.80/chinese food for lunch
June 14th/-$56.70/clothing store/new shift and pants
June 14th/-$20.30/drug store/conditioner, shampoo, body wash, nail polish
June 15th/-$11.30/drug store/prescription
June 15th/-$6.45/coffee and donut
June 15th/-$78.90/ car insurance
Tomorrow we will look at examining where Sally’s money went in a 7 day span.
- Is she in the red or the black?
- Did she under or over spend?
- What hasn’t Sally paid this month?
- Where has Sally’s money gone- what did she spend money on?
- What were Sally’s needs vs. wants?
- What patterns do you see?
- How could Sally save money?