If you could transform your finances in the next 30 days would you do it? Follow this super simple tip and I have no doubt that your eyes will be opened to the way you’re spending your hard earned money.
I’ve helped quite a few people set up their budget. Before we meet I give them homework – track where they’ve been spending their money. I encourage them to track their spending by writing down every purchase they make whether big or small for 30 days. If they spend $1 on a candy bar they have to write it down. If they buy a new TV they have to write it down. There’s no doubt about it, they’re always shocked at how they’re spending their money and how much they’ve blown on pointless purchases.
Tracking your expenses is simple. All you have to do is carry around a notebook and a writing utensil. Every time you make a purchase write it down. Yes, every purchase…every day…for 30 days! There are no excuses or exceptions. The process is pointless if you don’t follow through so commit to it and think of it as if Big Brother is watching you. Yes, the kind of Big Brother that will come to your house and give you a hard time if you miss.
It may not sound like a big deal but I’m willing to bet that if you stick with it and write down your purchases both you and your finances will be forever changed. Why? Because you’ll be more aware of the decisions you’re making with your money.
Don’t believe me? Take a look Darren’s story.
In his book, The Compound Effect, Darren Hardy shares the story of how he failed at his finances. In his early twenties he made a ton of money selling real estate. When he met with his accountant he learned that he owed $100,000 in taxes. He had made many times over that with his real estate business but hadn’t set aside any of that money for taxes. Now he had to sell even more properties in order to pay the back taxes.
Needless to say, Darren’s accountant gave him a stern talking to and kindly told him he had seen this happen hundreds of times. And just like I’m encouraging you to do, his accountant encouraged him to carry around a small notebook and write down everything he purchased. Listen as Darren shares how writing down every purchase in his money book affected him.
[pullquote2 quotes=”true” align=”center”]Because I had to log everything, I resisted buying some things just so I didn’t have to take out the notepad and write it in the dang book. Keeping a money log for thirty days straight cemented a new awareness in me, and created a completely new set of choices and disciplines around my spending. I found myself being more proactive with money in general, putting away more for retirement, finding areas to save where there was clear waste, and enjoying the fun quotient of money – ‘play money’ – all the more. When I did consider shelling out for entertainment, I did so only after a long pause.[/pullquote2]
Whether or not you think you’re spending is out of control I dare you to keep a money book for 30 days. What could it hurt? If nothing else, you’ll be very aware of where each and every penny that you spend is going.
You, your family, and your future are worth doing this exercise and keeping a money book for 30 days. I can’t wait to hear how it transforms your finances!
What are you waiting for? Go grab your notebook and pen and start tracking! (And grab a copy of The Compound Effect too because it’s a fabulous book…and not just for your finances but in every aspect of your life!