{"id":171857,"date":"2014-04-24T04:00:33","date_gmt":"2014-04-24T11:00:33","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=171857"},"modified":"2019-08-08T23:22:55","modified_gmt":"2019-08-09T06:22:55","slug":"how-to-track-your-spending-and-why-you-should","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/how-to-track-your-spending-and-why-you-should\/","title":{"rendered":"How to track your spending (and why you should)"},"content":{"rendered":"

Recently, an old friend emailed me for help with his family’s financial woes. The confession that followed wasn’t pretty, and included tales of student loans, car loans, unrestrained spending, and empty bank accounts<\/a>. It was all bad news, which I found rather surprising considering their relatively high income. So, of course, I asked about their fixed expenses. What were they?<\/p>\n

We emailed back and forth for quite a while, and he gave a few more details of their situation. For example, their house payment was only around $900. Affordable.<\/em> Car payments and student loans consumed around $450 each month. Not shocking<\/em>. Then there were the expenses that everyone must contend with — things like groceries, gas, school supplies, and insurance. It was all rather boring.<\/em><\/p>\n

<\/span>Follow the Money Trail<\/span><\/h2>\n

So, what was the problem? This is a couple who easily pulls in six figures and lives in an incredibly affordable part of the country. Their fixed expenses were relatively low, but they were constantly coming up short on funds. Why? Obviously, something was going on, but they couldn’t put their finger on it. And neither could I.<\/em><\/p>\n

“You guys should track your spending,” I suggested. “That’s the only way to see what you’re spending your extra money on.”<\/p>\n

He agreed, and I said that I would check back with them in 30 days. So I waited, and waited, and waited. A month later, I emailed to see what they had discovered.<\/p>\n

“We gave up,” he said. “It was too depressing.”<\/p>\n

“Depressing?” I asked. “More depressing than being broke<\/a>?”<\/p>\n

Apparently so.<\/em><\/p>\n

“The kids are always needing something,” he said. “And we hate staying home on the weekends. We want to go out and have fun<\/a>.”<\/p>\n

“But you’ll never know where your money is really going unless you track it,” I said. “Maybe you can just start over at the beginning of the month.”<\/p>\n

“I guess we don’t really want to know,” he said.<\/p>\n

It’s hard to argue with that.<\/em><\/p>\n

<\/span>Sometimes the Truth Can Hurt<\/span><\/h2>\n

Although he didn’t give any more details, I think it’s pretty clear what happened. They started tracking their spending and were totally appalled at what they found.<\/strong> I’ve been there.<\/em> When my husband and I started tracking our spending<\/a> years ago, we discovered that we were spending over $1,000 on food each month \u2026 for two adults and a baby! And that was on top of<\/em> the other ridiculous ways we were wasting our money. My friend was right; it was depressing.<\/em><\/p>\n

But, unlike my friend and his family, the severity of our situation actually forced us to change. Tracking our spending made us take a hard look at ourselves and what we really wanted out of life. And we didn’t see our failure as a prison sentence; we saw it as a call to action. <\/strong>We used the information we gleaned from tracking our expenses to transform our lives, pay off debt, and completely redesign our future.<\/p>\n

But my friend and his family just can’t do that right now, and that’s okay. The truth is, they’re not ready yet. It seems like most people need to hit rock bottom before they feel compelled to take drastic action. And, one thing I’ve learned over the years is that you can’t make people change. They have to want it. <\/em>They have to take it for themselves.<\/strong> And until that moment comes, you just have to watch helplessly from the sidelines.<\/p>\n

Related >><\/strong> Find the best budget apps<\/a><\/p>\n

<\/span>How to Track Your Spending (and Why You Should)<\/span><\/h2>\n

My friend’s situation is tragic, but it doesn’t have to be forever. I’m sure that he and his family will eventually tire of their situation again at some point and hopefully try again.<\/p>\n

But what about you? If you want to get in touch with the reality of your own situation, tracking your real spending is an excellent way to do just that. Sure, you may think<\/em> you’re only spending X number of dollars on your hobbies, groceries, and transportation costs, but are you<\/em>? Track your spending and you’ll know for sure. Here’s how:<\/p>\n