Being curious as to why I seem to take in a good stream of income and mysteriously have a “less than expected” amount in my savings account, I decided to track my expenses. The results were appalling…
To preface, I don’t want this exposè to be TOO revealing for obvious reasons, but I also want to give a good insight into my life and my habits to paint a clear picture. In fact, after seeing this, I am thoroughly convinced that cost cutting and expense management is one of the most “red flag” issues I have to tackle in my financial life. It is critical to my overall success as someone who strives to be financially free! In fact, I have a hunch that if I am not able to get a handle on this problem right now while I’m young enough not to have kids and a mortgage, I will really regret it later on in life when I start to have those BIG expenses (mortgages, car payments, college for kids). So with this and future similar blog articles , I want to shine a light on this area of my financial life and scrutinize it until I can get my spending down to reasonable, logical, smart levels. Without further ado…
A little while ago (a couple weeks) I did a bit of poking around the internet and found a few good templates and whatnot for showing my expenses by category on the internet. I figured the essential information and whipped something together quickly to reflect what I wanted and here it is….(details explained below)
So how does this seemingly simple thing work and how did I create it?
- For the entire month of April I made sure to spend all my money using my credit card. I did this just so that I could have a clear and accurate view come statement time that is all categorized and well documented in each place.
- Another good reason for spending all your money on credit card is rewards, but thats another story for another time.
- I created the categories that I wanted to track. Theoretically, all of the expenses in my life at the moment should fit into one of these categories.
- Dining out, entertainment – any kind of beer run, restaurant, date, movie etc expense
- Misc – Haircuts, toothpaste, random stuff that comes up
- Gas – obviously the gasoline that goes into my wonderful car that takes me to work and wherever else I need to be goin.
- Rent – the cost of renting a space to live and store my worldly belongings
- Special – This is the stuff that comes up every month and though it is something different and special every month, it is routine enough and BIG enough that I might as well track it. When I say this I mean like REALLY close friend or girlfriend’s birthdays, Christmas, anniversaries, graduations, these big things that seem to happen all the time.
- I did a quick figure of how much I maybe should be spending in each category at the moment (before knowing what the real numbers were). These numbers populate the “budget” fields.
- I go to my credit card website and do a pull on my expense for the last billing period which shows me all my spendings in the window that I desire information on.
- I go through and put each expense into one of the categories defined above and tally up the sums for each category (the “actual” fields)
- I scream and scratch inside my soul at how off some of my “should be” estimates were
- I make goals for myself under the “stretch” fields to reflect what I would like to be spending in those categories (realistically)
- Now I write this article.
So now, what are the key takeaways from reading this article? What the hell is the point of my spilling my beans on my life expenses to you? Well because America as a whole is plagued with this problem. People living beyond their means, people trapped in debt, needing to “consolidate their loans”, making minimum payments, letting their balances grow as they pay off only interest and little principal. This IS a real problem and if you are reading this and you are inspired to take a closer look at your own lifestyle and related expenses, then that is good enough for me. Better yet – if what I’ve done so far to try and reverse my problem helps you anyway in getting a head start with your problem, EVEN better! Best yet, you do the above, tell me how to improve how I communicate it to you and others like yourselves, and we can make the world a better, wiser place, one dollar at a time, because God knows I will fix this for myself, and you know what, you might as well follow along and we can help each other out along the way! If the last sentence or two sounds new to you, maybe you should check this page out. Thank you all very much, comments are greatly appreciated as always.
In the meantime, check this song out:
If I Never See Your Face Again by Maroon 5
