What did you buy today?
No, really. I want to know everything you bought.
Sit and think about it. Did you buy a meal out, school supplies for your child, a bathing suit online, or, ahem, a new “control” key for your Macbook Pro after your 1-year-old ripped it off? Well, perhaps that last one is just me (and it was way overpriced, mind you).
Now, compare what you think you spent to what you actually spent by looking at your statement online or the cash in your wallet. My guess is you probably forgot one thing. That’s okay; it’s normal. There are so many small purchases woven throughout our day, like signing up for Girl Scout cookies (Thin Mints for the win!) or getting gas. Some of these purchases are so normal that we hardly even register them.
However, when you want to get financially fit, you have to track your finances. My simple trick for keeping all your money and spending organized is this:
Write. It. Down.
You can text your purchases to yourself, sign up for an app that connects to your credit card and tracks it, or text your partner back and forth so you can both be aware. You can write it down in a notebook, open up the notes app in your phone and type it in, or try any other of the dozens of ways people use to keep track of their daily spending.
I’ve tried numerous different methods, and for me, it helps to check in every few days to make sure I don’t miss anything. In the beginning, though, you’re going to want to track daily just to get in the habit of doing it.
Here’s why it’s important to write down your purchases:
Lack of organization is the main reason why people have trouble with their finances. They forget when bills are due, they don’t remember to return library books (guilty!), and overall they feel scattered when it comes to where their money is going.
When you get organized by starting with the first step of expense tracking, all the other things fall into place. When you know what you’re spending, you know what bills you’ve paid and which ones you haven’t. You realize how much money is going toward entertainment when really it should be going toward debt. Overall, there are only positive things that can come from getting more organized with your finances.
When you’re aware of your spending, it bleeds over to other aspects of your life. So, when you’re aware of your money, you can then bring your spouse on board and create an awareness with them. You can even work together to track the purchases both of you make. Once you’ve started the conversation about spending and communication is open, you can save an incredible amount of money by tracking your spending together!
3. Identify Triggers
When you track your spending, you start to understand why you spend. So, if you notice that you have a ton of food spending, for example, it might be because you’re hungry during the day. If you know this ahead of time, you can buy snacks in bulk, pack a lunch, and make sure you have all the ingredients you need for that afternoon cup of coffee at your office so you don’t have to make a run to Starbucks.
4. Develop Good Habits
Once you’ve been tracking your spending for an extended period of time, you’ll notice your habits start to change. Because you have to write it down, you’ll start spending less. Because you know you spend a lot of money on snacks at the convenience store, you’ll start to avoid it. It’s just a natural change that comes with incorporating financial awareness into your everyday life.
For me, I find that every month I track my spending, I stay within my budget. On the months I get too busy to keep track, I always go over. That’s why I’m such a huge advocate for this organizational trick.
Remember, all you have to do is start small and write it down. You’ll feel infinitely more put together financially, and I think you’ll be surprised at how much overall financial organization follows this simple change.