Tracking spending is one of those virtues punted around the personal finance blog space that I’ve always admired and never bothered with. I mean, why do I need to track my spending? I track it already because I’m the one doing all the spending! My credit card certainly isn’t scanning itself at the check out, or secretly entering its details in my favourite online stores for magic parcels to be delivered (that would be delightful and dangerous). However, in a push to pull myself together after two years of full time work and little to show for it other than an emergency fund and some expensive international trips – great things, I admit, but not necessarily aligning with my long term goals – it was time to change.
The boyf and I wrote a new budget at the start of February. This budget incorporated every single thing we could think of: rent/bills/staying alive costs; petrol; future guaranteed trips (so many weddings and family overseas); medications; homewares; garden items; gifts for all occasions; and $120 in spending money a week.
That spending money encompasses all personal expenses: aside from the standard luxuries of clothes, shoes, eating out when it isn’t a date-thing (eg if one of us has a lunch with friends), and miscellaneous whatevers, it also incorporates things like haircuts.
Hilariously, I felt pretty smug about that $120/week. That’s a lot of cash per week. In fact, and pardon my extraordinary maths skills, that adds to up $6,240 a year. And seriously, with how we had carefully apportioned and accounted for all of our expenses for the year, what on earth could be left over to spend it all on?
Thankfully my misplaced confidence didn’t allow me to justify not tracking my spending this time. My primary thought was that I could use my tracked spending as a proud record of how under budget I stayed each week (I haven’t been drinking for the month of February, which has helped significantly). I also thought it would be interesting to know for real what I spend each week on various items. For example, lattes are the devil of the personal finance world; but working in a law firm, going out to coffee is the way to stay connected. It effectively defines your personal brand. I’m okay with parting with some of that $120 to improve my work networks. However, how much of that $120/week goes to coffee? I couldn’t answer that question, and the clearest resolution to being able to do so to me was to write it all down. A final motivator was my passion for recording things with pen and paper and flipping through stacks of filled out forms. It’s weird. I blame it on being a lawyer.
I’ve been using the Mindful Budgeting program from Blonde On A Budget, which is great and simple and has some excellent guidelines and motivators. However, a blank piece of paper or the back of an envelope or honestly your notes app would do just fine. You do you. I printed off a few sheets of the weekly spend tracker and kept the current week’s sheet in the back of my planner, so that I wouldn’t have the excuse of not having it with me.
Week one went swimmingly. I diligently wrote down all my expenditures and came in exceedingly under budget. I was so excited I renamed one of my accounts the ‘Gold Star’ Account and moved all unspent pocket money there (I know. You can laugh. It is ridiculous). Week two skated much closer to the edge. In fact, the reality is I went over the allotted $120, but I lost my piece of paper with the tracker. I also got over confident – I had stayed under by around $1.50 on the Saturday, so did my gold star money transfers, only to spend $29 on Sunday (it was being a good grandchild to my nan, but still – it was over budget). The worst part of this is I never wrote it down. I used losing the piece of paper as a sign that it didn’t matter. And that was the start of the epic blow-out of week three.
Goodbye overconfidence. Goodbye gold star account. Goodbye getting ahead. I went over budget by $80 in week three. $80! And the tragic thing is, I knew it but didn’t really know it until after the money was spent because I intentionally put off writing down the numbers. Yes, I stood there and scanned my credit card. And yes I entered the details in an online purchase. And yes, I even stupidly misread the fine print and was charged for something I should have cancelled – twice. But I didn’t realise exactly how much I’d muffed it until I wrote everything down and looked at those hard figures. It was surprisingly hard to swallow, all that pride and cockiness that $120 a week is a tonne of money, and anyway, I have everything I need! What could I possibly keep wanting to buy?
Turns out, wants never go away.
Week four I forced myself to suffer the consequences. I subtracted my overspend from week three, which left me with $33.98. Just another kick in the guts of how irresponsible I’d been, if I only had that much left for a week of miscellaneous purchases such as makeup remover, coffee, whimsical stickers and you know, wine.
I kicked off week four with two zero spend days, which felt like a real win. Much like giving up sugar, cutting spending only needs you to get through the next hour without buying something. And then the next hour. And you just keep going like that, one small portion of time successfully meeting your goal at a time until you’ve whittled away a substantial amount of your larger goal. Anyway, I nailed it and only spent $15.20 – $11 on coffee and $4.20 on take-away hot chips from chicken treat. This came as a massive relief after the panic at the end of week three.
I now present below the final figures for February, made possible only by carefully scrawling down each dollar I waved goodbye to and sent on its merry way:
NB: You’ll see that the week ending 14/02/16 has numbers in it, despite me saying earlier I’d lost my tracking sheet. A thorough scan through my transaction accounts and some sleuthing helped me piece together exactly what I had purchased in that week, so I’ve populated it that way.
What’s there to learn from these numbers?
First, I have a big problem with impulse purchasing stationery items. The main reason for this is I told myself I couldn’t buy clothes because I have so many. Instead of that restriction reducing my total expenditure, it simply redirected my spending to a new category. This is definitely a bad habit that requires stricter monitoring in March. Second, coffee isn’t as damaging as I thought. The week of the $28.70 coffee spend was when I picked up surprise coffees for my secretaries (I’m an angel), so yes Perth has steep coffee costs but they’re not that bad. Third, the motivation behind a lot of this $120 spending makes me sad. None of it is to charity. None of it is to ethical companies, or focussed on sustainable practice. A lot of it is selfishly motivated to appear a certain way and have certain things to make me happy, and honestly, although some of it does make me happy, the collective whole just makes me disappointed at my attitude towards my salary. My salary is not just an opportunity to spoil myself with immediate wants. It is an opportunity to create the future I want, for myself and for the world, one small step at a time.
This acknowledgment is my focal point for March pocket money spending. When faced with the option of spending from my $120, I will question whether that spend aligns with those concepts: a better future for me, and for the world. Sometimes it will align with one, and not the other, and that’s okay. But on plenty of other occasions, it will be important to pull back and say yes, not to spending, but to using that money in a better way, potentially (most likely) at a later date.
Tracking my pocket money spend for the month of February has been empowering and eye-opening. It has allowed me to pinpoint my weaknesses and examine my motivations. And it gives me a base to alter future behaviours. The boyf and I also electronically track our shared expenses in a spreadsheet, which has great benefits for awareness and transparency in our relationship. But I have found great understanding of myself in looking specifically at my little slice of the pie in excruciating detail.
March is going to be Gold Star month – that poor Gold Star account really needs some love.