TRACK YOUR SPENDING FOR 30 DAYS
I want you to track every cent that you spend over the next 30 days. Don’t be scared. You don’t have to give up anything. I don’t want you to change your habits – just do what you normally do, but write it down. This is about recording what you spend, where and, just as importantly, how you felt when you spent it.
When I say all of your spending, I do mean all of it. Cash, EFTPOS, credit card, debit card, regular bills, even what you borrowed from your mate and what you spent on others. Down to the last cent.
Often, awareness is all you need in order to create genuine change.
This is why I want you to complete this 30-day “financial awakening” before moving on to see what spending habits you want to change.
How To Track Your Spending
There are lots of ways you can do this:
A notebook or diary you use for the whole period
A small piece of paper you take with you each day
An index card
It doesn’t really matter, it’s totally up to you. But I do want you to do it on paper. And you should keep it with you at all times. That way you can write down each item immediately.
Yes I know there are apps for this, but the point is about awareness and writing it down on a dead tree helps create a state of mindfulness that an app can never replace.
write down your spend as soon as possible (within 10 minutes ideally)
use paper and pencil or pen
write the exact amount – no estimating or rounding
note where you spent it
note how you paid for it – cash, credit, regular payment
note how you felt at the time – were you bored, hungry or was it habit
note who you were with or if you were alone
each evening spend a few moments to reflect on your spending. How do you feel?
Remember this is not an exercise in budgeting or analysing your spending patterns. Just keep a record of your spending. Don’t worry about categorising everything right now. There will be time for that later.
Don’t put it off until tomorrow or the start of the month or the New Year. Start right now.
It will get easier as you go through the 30 days. At first you may find it difficult or irritating, but the initial excitement of the new challenge helps motivate you.
By the end of the first week this fades and the system is beginning to be a habit and it gets easier to keep up.
By week 2, you are likely to start enjoying your nightly reflection. You’ve got the system down pat, but are maybe surprised by how many little transactions happen each day.
As week 3 progresses, things are really starting to click. You don’t even notice the effort of jotting down your notes - it seems like a natural extension of every transaction. You may even start to change some spending habits here and there just because you knew you’d have to write it down. This is a great side effect but it’s not the object of the exercise.
By week 4, you’ve developed a good sense for what, where and why you spend. Now it may be time to look for a more streamlined way of tracking your expenses.
When you’re done with 30 days of tracking, take a look back over your notes. Try to categorise each expense.
Look for spending triggers. Do you spend because you are bored? Or because its 11AM and you always buy a coffee? Maybe spending is just something to do at lunch time? Are there some friends who lead you to spend more than you really want?
Now you have a great base for starting your budget.
Vince Scully | LifeSherpa
With over 25 years in Financial Services from consulting to management, Vince Scully is the go-to guy for wealth management and financial advice. Vince founded the Calliva Group; a fund manager, product issuer, advisor and lender to Government and private clients. Vince is an advisor to the Wealth Management Industry, and prior to his role as CEO at Calliva, a senior member of Macquarie bank’s infrastructure team.