Every month, or at least every quarter, businesses are required to create a status report. To some people, it seems like a waste of time, or even a little insulting to be forced prove that you are worth your paycheck. From the other side, it can also be a great opportunity to show how much you have done for the company and why you deserve that big raise.
Keeping track and reporting back is key in any corporate situation, but what about your home finances? It is true that you can come up with complicated systems to track finances, but often the simple solution is the best. Simply writing down what you spend money on, and then reviewing it each day for a minute or two can bring a lot of clarity to your finances. If that is coupled with a short note about why you spent the money, it can be very effective.
There are also many different ways to track your expenses. John Rockefeller kept a notebook on him and wrote everything that he purchased down. Today he likely would have used a financial app that automatically tracks expenses. Once per day in the evening, or even while you are riding the bus to work, you can go through your expenses and make a note about it.
By simply seeing the day’s expenses at a glance, many people are able to understand what they are spending money on and feel more connected to the goals they are trying to achieve. It also helps them get a clearer view of where they are at in comparison with where they were at, and see the progress that they are making as they look back over the previous days, weeks or months.
Another benefit you might find as you journal your finances is that you will have time to focus on your finances. Money has a way of focusing our attention on the things that we buy and we often forget that the money was involved at all. By focusing for a few seconds on the money that we are spending, and where it came from, you can evaluate that purchases more clearly and see if you would do something different the next time.
This is also a great way to evaluate your purchases and see how you felt after the purchase. The next time you are looking at buying a phone, check your notes from the last purchase. You may be surprised at how bad your memory is of your experience. If you are using a financial tracking app, using #hashtags to organize your thoughts allows you to quickly search through them later.
Having this history can also help those around you, including your children, learn from your mistakes and your successes. If you are brave enough to share the innermost details of your finances with friends or family, they can look through your history and offer advice, or make suggestions on how you can improve or reach your goals more quickly.
To help reach these goals, you will have to make some sacrifices. In a notebook you can write down things that you didn’t buy and why you decided not to spend the money. This makes not doing something, actually doing something.
With financial tracking apps, there isn’t a transaction to comment on, so you can make notes on transfers to show your progress. Something as simple as not going to Starbucks today and instead making a $10 transfer to your savings account. In your notes, write down why you made that sacrifice and use a hashtag like “#SavingForMexico” in the comments. Then when you go back later in the month and find 20 results for #SavingFor Mexico” you can see the little things that wouldn’t matter anyway that you passed up to save for the trip. This gives you a chance to celebrate the little victories you likely would have just forgotten about.
If you are doing things to earn a little extra money you can make notes about why you were doing them and how you felt about each step. Was the money you earned worth the time and effort? These moments of reflection can help you focus on what earns you the most, while taxes you, financially and emotionally, the least.
The first step in any financial plan is to gather the information. Automated apps are great at gather data, and with a little extra effort, you can turn that data into useful, actionable information that will save you money, highlight your financial successes and motivate you to do even more with less.
Happy journaling!
Featured image credit: PEXELS
Aug 13, 2015
Aug 13, 2015
