Now that you’ve made your Happy Life List, the next step in being the Boss of your money is seeing where it’s going right now, AKA taking a financial inventory. It’s easy and painless, don’t worry. All you need to do is track everything you spend for at least a typical week; gas, coffee, red bull, lunch, all of it.
You can either do it as you go during the day, or just be sure to get your receipt for every transaction and enter it all in at once later (but soon, so you don’t forget or lose receipts). Don’t change anything from your usual routine, as much as possible.
Taking a financial inventory like this will give you a good idea of where you’re leaking money, if you don’t already know. You might just be shocked by the monthly totals. I’ve known people that spent the equivalent of a car payment on coffee every month, especially when you count the tip to the hot barista (you are tipping, right?). If you can afford it, go for it, but if you’re driving an oil burning ’92 Jetta with windows that won’t roll down, you may want to rethink your choices.
There’s an app for that …
There are some really convenient apps for this, like Spending Tracker, which is my favorite price at the app store (free!). Looking at your spending patterns long term can really help you get a handle on what’s really happening with your money and what adjustments you can make to take some stress off. It also helps you start working toward what is really important to you. Sometimes just the act of writing down or entering what you’ve spent will make you stop and think ‘Oh, wow’ when you realize how quickly little things are adding up. I’ve even found myself not going through with an impulse purchase because I didn’t want to write it down! It’s kind of like carrying a $20 and not wanting to break it, you know?
The point is that you can’t see where you can make changes until you see what you’re doing right now. It’s why dance schools have floor to ceiling mirrors. In order to learn the steps you have to know where you are and see what really is.
Now that you know where you are, let’s work on how to get you where you’re going.