Have you ever asked yourself “Where did all my money go?”
Today’s podcast episode will help you find out!
You’ll learn how tracking your spending can help you answer this question as well as improve your overall spending habits.
Plus, I’ll teach you some tips to make tracking easier and more effective.
Your action task for this week is to start tracking your expenses. You can use a Notes app on your phone, your bullet journal, or print out the free expense tracker below and use it. Just start tracking!
If you thought this episode was helpful, I’d love it you could leave a rating and review on Apple Podcasts.
And don’t forget to hit subscribe so you never miss an episode!
Thanks for listening!
Have a question or an episode idea? Email me at email@example.com or DM me on Instagram @GoFromBroke
Prefer to Read?
Below is the transcript from today’s show. Or you can download the full transcript as a PDF.
Picture this. You're standing at the kitchen counter sorting through the day's mail, and you come across your credit card bill. No big deal. You open up your bank account to go ahead and pay it, and all of a sudden, the ground drops out beneath you. Your stomach's doing flips because you don't actually have the money to pay that bill. But then you realize Friday's payday. And you start to relax again. But you can't help being annoyed and a little bit concerned, as you ask yourself, "Where did all my money go?" Well, that's what we're gonna talk about in today's episode. Welcome to the Go from Broke Podcast. I'm your host, Natalie Graham, money coach and founder of Go From Broke.com, where I teach you how to take control of your money so you can stress less and save more. Today, we're going to tackle one of the biggest problems people have when it comes to taking control of their finances, not knowing where your money is actually going. If you've ever asked yourself this question, you're not alone. It's actually a relatively common concern people have. I know I did. In spite of making good money, we just couldn't seem to get ahead. The fact is, we were like the majority of U.S. Consumers out there living paycheck to paycheck. It doesn't actually matter how much money you make if you spend it all. And if you can't pay off your credit card bill until payday, you're living paycheck to paycheck. So what's the answer? How do you figure out where all your money is going? Well, it's actually pretty
simple. You just have to track it. I know it's not glamorous. It's not even really fun. But it is effective, and it's not complicated. You simply need to start tracking every penny you spend. And I mean, every penny. Having a general idea of where your money is going just won't cut it. You need the hard data that deliberate and detail tracking will give you. Tracking won't just help you figure out where your money's going. It will help you in a few other ways. First, tracking your spending is really the best and only way to gain awareness into your spending habits. Not only will you finally be able to see exactly where your money has gone, but you'll start to notice patterns. These patterns can help you adjust your spending behavior so that you can make better and more informed decisions moving forward. Second, simply by writing down your expenses, you may actually curb some impulse spending. Think about how often you've just grabbed a candy bar or soda when you get gas or go through the checkout line. It may seem like a harmless splurge, but it's that sort of mindless spending that leaves you wondering where your money went. A dollar here and there adds up over time. And some of those harmless splurges may not actually be as cheap as you think they are. I used to run through the drive-thru several times a week and think it was no big deal since I was ordering off the value menu. But that "value" is a bit of a misnomer when you start combining items to make a full meal. All of the sudden that two dollar burger becomes a six dollar meal. Multiply that out, and we're talking close to $100 a month just in fast food... for one person! Now, I want to be clear that if you prioritize the convenience of eating out, there's nothing wrong with that. It's simply about the awareness of where you're spending your money and making sure that those decisions are intentional. Most people have no clue how much they spend on food, so that can be one area to look at to see where your money is going. Tracking your spending will help you identify these kind of spending leaks. There's one other type of impulsive spending that tracking your money can help you stop making -- guilty pleasure spending. Again, there's nothing inherently wrong with splurging on things that make you happy as long as it's deliberate and within your means. But if you buy something and you hesitate to write it down because you feel embarrassed or ashamed or guilty, that's probably a sign that you don't need to be buying that thing. Remember, money is just a tool. Spending it should feel good. If you're feeling guilty or you don't want to admit to buying something, pay attention to that feeling. That's your body's way of telling you "don't do this!" This leads us into a third benefit of tracking your spending -- making more informed spending decisions. Part of taking control of your money is deciding what you want it to do for you. We'll discuss goal setting in a future episode, but just know that having clarity around your financial goals will make it a lot easier to manage your finances. Tracking your spending will help you determine which expenses are helping you reach goals and which are steering you away from them. And once you have a goal to aim for, you'll find it easier to start spending according to your priorities. For example, when we started planning a Disney trip, I was able to talk myself down from all those spontaneous trips through the drive-thru by thinking about spending that same amount of money on a Mickey ice cream cone or fun souvenir. And yes, a Mickey ice cream is about the same cost as a meal at McDonald's. Okay, so hopefully I've convinced you why you should start tracking your spending. Here are some tips to make it a relatively painless process. First, make sure you're tracking your spending when you spend it. You don't have to stop in the checkout line and write it down. But try to write down your expenses as close to the point of purchase as possible. This will help you not forget about it, but also help build that awareness and accountability that we're looking for. Second, make sure you're tracking it all in the same place. Whether it's an app, a notebook spreadsheet, whatever. Tracking is only useful if you can look back and see the data. Having the information spread around is no different than having a stack of receipts you never go through. Third, make a note of how you feel after you've bought something. Some purchases like getting gas or groceries, aren't going to give you too many feels unless you notice how expensive the gas has gotten. But those impulsive runs through the drive -thru or that Target trip that turned into a shopping spree. Those may stir up some emotions that are worth noting. Another tip is to not be too hard on yourself. Tracking your spending is simply about gathering information. If you can adjust your behavior as you go, that's great, but don't force the issue. Try to give yourself as much information about the situation, so when you do look back, you can see if there are patterns or habits that you want to work on. Now on to the final step, analyze your data. After at least a week of tracking your spending, it's time to start looking back to see where your money's been going. It should be a quick and easy process if you've kept it all in one place. What you want to do is just look over your spending and see if there's anything that jumps out at you in terms of things you either don't want to be buying or habits that you might need to adjust. I mentioned for me how tracking led me to see how much I was spending on fast food, but by noting when I hit those drive-thrus, I was able to see I had a habit of doing it whenever I was actually out running errands. So it was kind of like I was treating myself or rewarding myself for doing that boring chore. Recognizing that that was a trigger for me helped me plan around it so I could either eat before I left or go shopping earlier when I wouldn't be craving Taco Bell. Okay, so now we're on to your action task for the week. This podcast is all about giving you actionable advice so that you can start taking control of your finances today. So this week is probably pretty obvious what I want you to do, track your spending. But I want you right this minute to decide -- right now, before I'm done talking, before this episode ends -- decide what you're going to use to track your spending. Do you have a notebook or a bullet journal that you carry around everywhere? Maybe your phone. Most of us have our phone on us all the time. Just use whatever notes app is on there and you'll be good. Just remember, the whole point is to gather data. You don't need to worry about big fancy apps and budgeting tools and all that stuff yet. You just want to record your spending. Once you've decided that, shoot me a message or tag me on Instagram @GoFromBroke so I can cheer you on. And don't forget to hit subscribe so you don't miss any future episodes. Make it a great day!