In this blog post, we will explore if tracking your spending is worth the time. I'll give you a HINT - oh okay I'll just tell you now - IT IS! :)
There are two main reasons why people do not like tracking their spending.
it does take time
most of us do not actually want to know how much we spend on certain categories
It's easy to say how much your mortgage or car payment is. But how much do you spend on groceries, going out to eat, miscellaneous items at Target? Most people honestly have no idea & they come up with a number in their head that makes them feel okay. And yet at the end of each month, they find themselves scrambling & running low on money, leading them to feel like they are living paycheck to paycheck. What happens is that they AVOID truly looking at how much they are spending because thinking about it causes anxiety, & avoiding knowing the true answer leads to feelings of relief in the moment. But the problem is that the next time that anxiety about spending pops up, it will feel more intense than the previous time. And when we avoid knowing over & over again, the anxiety continues to increase, while our bank accounts continue to decrease.
Oftentimes when people start to panic over money, they immediately say things like "I'm just not going to go out to eat at all this month!" or "I guess I'll never go to Starbucks again." without actually looking at the numbers. These statements are not only difficult to achieve, they may not alleviate the stress of your spending. Until you fully know what your spending looks like, how do you know where or how much you should cut back? Perhaps you are spending $1,000 on groceries every month & $50 on Starbucks. If so, looking at how you could cut down on your grocery bill & eliminating one trip to Starbucks a month will be more helpful than simply saying you will never go to Starbucks again. See how having the information can help you make informed decisions?
Understanding & tracking your spending can, & likely will, feel overwhelming at first. But just like any habit, the more you do it the easier it will be. And I can honestly say that tracking your spending can absolutely be the most impactful thing you can do for your finances. Once you know your spending habits, you can begin to evaluate your spending, focus on what important to you, & eliminate or cut back on the things that are not. But you cannot make the best choices or set the right goals until you understand your numbers.
If you are ready to start tracking your spending, I recommend starting with just one category. Choose going out to eat/take out & only track that category for one month, then evaluate any changes that could be made. You can always add more later, but starting small is what will help you continue that healthy habit & ensure you will make the right choices moving forward. You can do this!!!
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