Tips For Tracking Your Spending Habits
Over the last month we have talked about how to start the holiday spending season with a plan; how to be strategic and find the best prices; how to avoid being the victim of misleading advertising and sales tactics, and last week how to understand the true cost of buying with cash versus credit.
As the month of December starts the calendar tells us the holidays are a few short weeks away. If you have been following along since November hopefully you are using some of the strategies and tips. Now, four weeks into our recalibration how can you tell if progress is being made?
In order to get a true assessment of whether you are on track you need to take a look at what happened last month. Every month money comes in and money goes out. Hopefully some money is also saved, but overall the movement of money is called your cash flow and every person and every household has one.
Most planning uses the approach of trying to estimate and predict future spending but this can be very inaccurate. Instead, now that November is behind us it is a great time to review what was actuallyspent last month instead of relying on what you thoughtyou would spend.
Step 1 - take a look at what was spent to determine if your holiday spending is in-line with your plan. November and December will likely have categories of expenses specific to the holidays so let’s track spending in the following areas:
1. Gifts $ __________
2. Groceries $ _________
3. Eating out $ __________
4. Travel $ __________
5. Decorations $ __________
6. Other $ __________ (anything specific to your family during the holidays)
What was spent in November? Don’t cheat your list or your numbers because accountability is key. If you overspent in an area, isn’t it better to know at the beginning of December instead of the end of December? Now that you know your numbers you can determine your target spending amounts for December in the same categories. Everyone needs a guide or path otherwise how do you know if you are going in the right direction?
Step 2- take a look at your account balances. Since some of these purchases were likely made with credit, as we learned last week paying them off as soon as possible is important. Don’t delay in making credit card payments this month and pay off the purchase or at least as much as possible.
If purchases were made from a cash account or debit account check your balances to know how much is available for December. Seeing the account balance is an important step so do not guess or approximate. The reality of seeing the number will help you stay on target.
Now armed with information from Step 1 and 2 you have a guide for spending in December. Since we are halfway through our recalibration think of this as a gift because you can congratulate yourself for staying on track or you can give yourself a do-over to start again and still make progress by the end of the year.
The important thing about this financial recalibration is the intention to make this spending season one that doesn’t leave you with regret. You probably will not hit all of your targets and some over spending will likely happen. As mothers we put ourselves under a lot of pressure, so think of this holiday season recalibration as a journey toward improvement. It will not be perfect, few holidays are! Instead you are leading yourselves and your families in the direction of more responsible spending. Let the end of 2018 move you in the direction of progress not perfection.
Asalyn Coachman is a Registered Representative of and offers Securities through The O.N. Equity Sales Company, Member FINRA/SIPC, 39395 W Twelve Mile Rd., Ste 102 Farmington Hills, MI 48331 (248) 482-3600. Investment Advisory Services offered through O.N. Investment Management Company. Financial Architects, Inc. and Mother Honestly are not subsidiaries or affiliates of The O.N. Equity Sales Company or O.N. Investment Management Company