Are You Wasting Your Money?

Posted on: Jan 28, 2014

Categories: Goal Setting

Financial TrackerWhat do you want to do with your money this year? How much do you want to spend? How much do you want to save?

I’ve spent this month discussing goals, and I want to now focus on a subset of them: your financial goals.

There’s nothing wrong with wanting things, and having the right resources or money can often help to make those desires a reality.  But remember: there is a difference between aspiration and greed. Greed is wanting things without purpose, but aspiration is about surrounding yourself with the tools and accoutrements that will assist you as you pursue your goals.

In my last post I gave you a downloadable Time Tracker for you to evaluate how you really spend your time. Now, I want you to fill out a similar form, only this time, I want you to evaluate how you spend your money.

Budgeting is an important part of meeting financial goals, but even when you think you have your budget figured out, it’s necessary to keep an eye on any “Uncategorized” spending, because that is the spending that will off-set any progress toward your goals.

This Financial Tracker doesn’t focus on your known expenses — your mortgage or rent, your utility or internet bills, your groceries, gas, or your insurance plan — you should have a solid idea of what these things cost on a monthly basis, and you hopefully have a plan for how to pay for them all.

Rather, this worksheet will help you recognize how much money you spend on the “Uncategorized” things, such as Starbucks coffee, movie tickets, or iTunes purchases. If you’re struggling to keep your spending under control, it’s probably these small, random, sometimes unexpected “Uncategorized” expenses that are creating financial stress in your life, not the regular bills that you’ve already budgeted for.

Print out my Financial Tracker and take a few minutes today to guess how much you spend in each of the categories each week. Do your best to write down all spending in these areas over the next week and enter the totals at the end of each day. At the end of the week, find your total spending and see if your prediction matches what you really spent.

If you found that you spent way more than you expected, then use this Tracker as a reality check. If you’re hoping to save money this year, then cutting back in the “Uncategorized” section is a good place to start. And even if you spent exactly what you expected, you still need to take a critical eye to the Tracker to evaluate whether the spending you’re doing is helping or deterring your financial goals.

Need help controlling your spending? Try using the envelope method: Each week, take out the amount of money in cash that you’re allowed to spend on a given category, such as entertainment. Throughout the week, use the cash in the envelope to spend on entertainment, and know that once the envelope is empty, you’re done spending money on entertainment for the week. If you limit yourself to the cash you have on hand, you’ll be less likely to overspend (unlike when you use a credit card).

What do you want to do with your money in 2014? Use my Financial Tracker to make sure that you accomplish what you set off to do.

Get your FREE download of my Financial Tracker worksheet here.


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