Do you find that you have “too much month at the end of the money?!” Never seem to have enough and you don’t know why?!? If you relate, then I may have a solution for you – borrowed from millionaires. It’s very simple. Track your spending – every penny.
“But it’s too hard!”
“It’ll make me feel cheap and miserly!”
“It’s no fun.” “I don’t have that kind of discipline.”
I can hear all of your objections. I know, because I had them all myself! The thought of tracking my spending would fill me with dread. I didn’t want to know – because then I wouldn’t have to feel guilty about buying the summer blouse, gorgeous pair of shoes, yummy Starbucks caramel latte and yet another pretty notebook (I have a “thing” for beautiful stationery 🙂 ). When it came to month-end and I’d overspent, I could feign surprised shock and tell myself that I just didn’t know how it happened.
But the truth is that if you really want to take control of your finances, and if you have a dream to become financially independent, you’re going to have to track your spending. Millionaires do it, after all.
The authors of ‘The millionaire next door’, Stanley and Danko, who conducted detailed studies of 500 millionaires, note that about two thirds ‘know exactly how much they spend each year on food, clothing and shelter.’
According to them, ‘if you can’t control your spending, you’re unlikely to accumulate prodigious amounts of wealth.’
Here’s how tracking your spending can help you :
- Self-control : Just by monitoring what I spent, I automatically became more careful with my spending. I actually spent less without really trying to. Darren Hardy, in his best-selling book ‘The Compound Effect’, recommends tracking any behaviour that we want to improve. So if you find that your spending habit is hard to control, tracking your spending will actually help you gain greater control! The simple act of noting what you spend makes you more aware of it – which means wiser buying decisions – and less emotional, impulse buying.
- Giving your money purpose : I found also that by tracking my spending, I could analyse exactly where my money was going. I figured out that we were spending too much on groceries. And yes, my latte and croissant habit was a little out of control! Now don’t get me wrong – I still love a latte – but now I make it more of a fun treat than my daily necessity!This helped us become far more purposeful with our money, which felt good. You might find, for example, when you realise that you’ve been spending a large percentage of your budget on eating out, you’d far rather set aside half of that money towards a dream family holiday.In conclusion, guess what?! After doing it for a while, I now love tracking what I spend. It’s my guilty pleasure – who would have thought?!What about you – do you track your spending?