The easiest way to be financially confident? Track your Money.
It's not HOW MUCH you bring in, or how much you spend, but it's KNOWING where your money is!And not where you *think* your money is, but where it actually is ;) We're talking about all monthly expenses, savings, retirement funds, and even all that cash stored in that dusty box you've probably forgotten about.
It's worth it even if you just do it once! I seriously can't emphasize that any more - when you know where your money is going, you will feel more confident. plain and simple. I can't promise you that you'll be happy with the results (although you may also surprise yourself), but at least you know exactly where your paycheck is headed.
And it's not that hard to do, really. A bit time consuming for sure, but easy to do. For your accounts, all you have to do is log in and copy and paste the amounts into a spreadsheet - you can create your own, use mine, yodlee, mint, etc - whichever increases your odds of sticking to it.
And then for the "tracking" part, you can either:
- Tally up all your receipts at the end of the month - via the shoebox method.
- Export your checking transactions for the month.
- or even Using your credit card statements! This one isn't for everyone (you know who you are), but if you applied all payments through the card, you'd have a nice breakdown all in one spot to use. Def. not for everyone.
I read a great post over on Vilkri's blog that summed it up pretty nicely, giving a few of us bloggers a pat on the back. But besides the awesome link love and feelgood-ness (which of course is nice), it was a good reminder that I've come a long way since diving into all of this stuff. And i have to admit - it feels pretty f'ing good!
It also reminded me of another would you rather-like scenario a co-worker and i were talking about yesterday. He asked me if i'd want to know the whole truth on our start-up's financial situation if i had the chance? At first, i was like noooooooooooo way! Ignorance is bliss baby! But the more i thought about it last night (financially addicted much?), the more my answer changed to - "Yeah, lay it on me!".
While i'm sure there are plenty of things going on behind my back, i feel like getting the details would surely help me plan better! And not only personal things, but day-to-day management of my team and future meetings. It would probably be the shock of a lifetime (worst case, anyways), but it would inevitably wear off and i'd at least be "in the know" at that point.
But back to being financially confident - the easiest way to do this is by monitoring your expenses and creating a managable budget around it. It probably won't be fun at first, but after a while you won't even notice it. Hell, if you're anything like me you might even look FORWARD to it! haha...but don't count on it, i'm pretty addicted ;)
Labels: advice, budgets, money management
posted by J. Money at
9:02 AM
9 Comments:
Mint isn't time-consuming at all, and it's so easy. It tracks and categorizes everything for you, then compiles the information into helpful graphs to track trends. I highly recommend it. It's basically an automated version of the time-consuming, sometimes confusing "shoebox method."
Tracking expenses completely changed the way I view spending and budgeting! It's seriously the best thing you can do for your finances.
Great post! And it did take a couple of time consuming months until it started really rolling. Now I have a beautiful Excel spreadsheet.
And it is very true that tracking you money will allow one to feel highly confident and Sexy. :)~
KarenYeah, i've heard some pretty good things about Mint - i'm glad it works for you! I used Yodlee for a month, but i found that creating my own spreadsheet worked easier for what i needed it for.
Christine - Thanks! And good work yourself :) If you were up for it, I/we'd love to see what it looks like! You don't have to leave any of the details if you didn't want, it would just be cool to see how others have it set up :)
Hi J. Money, this was a very good post. Tracking $ is very valuable. I went through several versions of tracking and think I finally stumbled on some sort of decent system. We'll see.
Ha, this is so easy-peasy for me. Monthly income roughly $400. Car insurance- $62. Medicine- $28. Gas-$100ish. The rest goes to a tuition fund to try and save enough, plus eating at school sometimes, baking supplies, or a pair of thrift-store jeans.
At least that's one plus to barely making anything-- it's easy to track, huh? :)
PS I saw your comments on my blog, and they were very cute! Thanks for visitng!
Good work Budget Mama! I'm sure it'll change as time goes on :)
ka1t_lyn - oooh i love thrift store jeans! hard to find some good ones around here, but def. fun searching.
and oh yeah, i totally remember making $400! we've all been there, and to be honest it's a lot less stressful ;)
I don't feel so weird no that somebody else out there actually looks forward to budgeting money. ;) Seriously though, it feels good to take a lump sum of money and allocate it to various purposes.
I agree 100% with this post; in fact, I just wrote a very similar one. It's so important to get in tune with your cash flow.
I track my finances as well. I created my own spreadsheet in google docs because when I started using Mint it did not correctly categorize everything.
I am also using Quicken online because it is now FREE!!!!!
I hardly ever use cash (only on laundry days) so I have credit card receipts for everything (plus getting cash back!!!!)
@ Blake - hell yeah, paydays are my FAVORITE cuz i get to xfer out all the money in the different departments :) i also enjoy paying the bills - all these little "accomplishments" build up and make me happy! haha...
@ lulugal11 - you beat me to it! i'm about to post a little somethin' somethin' on the Quicken free stuff too :) glad you like it so far, i haven't tried it yet.
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