One of the best ways to begin taking control of your finances is to keep track of your spending because it allows you to gain a deeper understanding of how you manage your money. What do your spending habits look like? Where are you spending inefficiently or spontaneously? Where are there opportunities to cut back and save more?
When I began counting my pennies, I was afraid to log into my accounts. Credit cards, automatic transfers, and Apple Pay had made it very easy to buy on autopilot, and I didn’t want to face the reality of what I’d managed to spend. Eventually, I grew to embrace the process, and it came with a host of positive benefits. I became more conscious about what I purchased and more in control of where my money went, and I grew smarter about financial planning, investing, and saving.
For the next 30 days, track every penny you spend.
*Use a spreadsheet, a journal, or budgeting software. I recommend mint.com. It allows you to easily and securely link your financial accounts (including banks, credit cards, and investment accounts) to automatically paint an accurate picture of your financial life.
*At the end of each day, review every transaction.
*Record and observe your spending patterns, but spare yourself any judgment, self-criticism, or guilt for poor financial habits. The simple knowledge of where your money is going will motivate you to rethink how you budget, spend, and save.
- WHO, WHAT, WHERE, WHEN, HOW OFTEN – list the details of the challenge on the Accountability Tracker.
2. DOCUMENT IT ON THE CHALLENGE CALENDAR:
3. THE REWARD – don’t forget to document your reward on the accountability tracker! How will you reward yourself? Do you respond better to milestone rewards or are you holding out for the big daddy upon completion? What will it be? What motivates you?
4. KEEP TRUDGING FORWARD – don’t give up. If you fall off the wagon, keep moving forward! Ask for help. That’s what family and friends are for!
5. REFLECTION – reflect on the challenge – what went well, and what could be better. Learn from this and use this to improve on yourself and your future challenges!
What’s your Challenge? Get started today!