What You Don’t Know Can Hurt You…
When was the last time you wrote down every stick of gum you bought, or every soda or car wash you purchased? When I did it, it shocked the pants of me just how much I was spending on such “petty” things. If you’re like most people, you’ve probably never even thought of doing such a thing. Too tedious, right?
You probably have a ballpark figure of what you’re spending, in total every month, but no doubt, you don’t know an exact number, right? You’re thinking “how much could candy and soda really be costing me anyway? It’s just small change.” The problem is that when people don’t keep track of their actual spending, they end up wasting hundreds, even thousands of dollars they had no idea they were spending.
Take for example Stan and Arlene Harbrecht*, one of Alan’s Money Mastery coaching clients. They desperately wanted to keep their daughter in college, but on their modest income, couldn’t find a way to do so. The Harbrechts came to Alan for help. When Stan began tracking his spending, the results were shocking! His daily routine of stopping in 7-11 to talk with his trucking buddies and buy a Big Gulp was costing him more than $80 a month. When he combined this cost with all the other junk food he was buying, he realized he and Arlene could save as much as $154 a month if he quit hitting the convenience store every day. Tracking changed the Harbrechts’ lives.
Multi-billion dollar sports associations know the value of tracking. The NBA, the NFL and other organizations keep very close track of each athlete’s playing statistics so that when it comes time to trade or negotiate contracts, they will know the exact value of that player. They also make these playing statistics known to the public to heighten awareness. This awareness creates interest, which in turn creates profits. A system of tracking is vital to any major corporation or organization that wants to stay in business. It should be absolutely necessary for you, too.
Besides feeling (without cause, I might add) that tracking is too tedious, people also resist tracking because they’re afraid to find out just exactly how bad their spending habits have become. Instead of really looking at themselves, they play mind games:
Game #1: Avoid balancing their bank account.
Game #2: Blame employers and/or think there isn’t enough money coming in.
Game #3: Claim they never dreamed anything could go wrong when emergencies hit.
If you’re playing any of these games with yourself, maybe now is the time to have the courage to look at your real situation and face it head on.
Those who have become financially successful find power in tracking. That’s because they become aware of where they really place their priorities. They discover things about their spending habits, their emotional needs, and their actual monetary losses that they never knew before.
Does tracking have to be tedious or time-consuming? The truth is no. Here’s why:
• A good system of tracking can take as little as seven seconds to record each transaction, and even less if you use this phone APP that I personally love.
• Examining your habits by recording every expense for a 30-day period will reveal your priorities and values. Rather than being tedious and boring, the experience will be highly emotional and will actually motivate you to make some serious changes that you wouldn’t have felt compelled to do otherwise.
One final thought on tracking. If you think you’re already living on a tight budget and therefore don’t need to track your spending, you probably need to put that notion aside. If you aren’t tracking the small purchases as well as the big expenses, you cannot get a real feel for how much money you actually have.
A good system of tracking is like a rudder on a boat. It helps steer you in the direction you want to go, not in the direction that mindless spending will take you. A good system of tracking helps you eliminate the “spend as you go” and “month-to-month” attitudes that stamp out financial freedom.
Adopting a a good system like Money Mastery will bring huge rewards both financially and emotionally. Learn to love keeping track of your money. For more information on tracking, read MONEY: What Financial “Experts” Will Never Tell You (Amazon.com).
* Names have been changed to protect privacy.
How Much Are You Really Spending?
What You Don’t Know Can Hurt You…