Have you ever chosen to remain ignorant? We all know that what we don’t know won’t hurt us, correct?
There have been times when I haven’t tracked my spending daily because, frankly, I preferred ignorance. Although I know that one of the best ways encourage good financial decisions is to watch the money go where it goes, I’ve opted to avoid it.
The problem is that avoidance is hardly ever the key to being successful in any area. This fact is especially true in personal finance.
Perfect Timing for Tracking
We are a family of five coming off the Christmas season and entering into a a steady increase in our children’s extracurricular activities. It’s imperative that we keep our fingers on the pulse of our bank, checking, and credit accounts.
Even if we have plenty of money to cover the expenses, we can make even better decisions if we watch the flow.
Here are the reasons why keeping track of the budget is a good idea:
- Knowing where the money goes keeps you accountable: The plain black and white of a spread sheet yells at me if I make a poor decision and gives me a word of encouragement if I make the right decision. It’s amazing how that works.
- Keeping monthly track of a budget helps uncover sloppiness: If we’re being lazy and going out to eat too much, we see the error in our ways and can commit to better self-discipline.
- Tracking spending uncovers opportunities for saving: On the positive side, if we track our spending and notice we don’t need to budget as much for a certain item, we can reroute that money towards retirement, emergency, or large purchase savings.
- Seeing how we’re spending reveals our priorities – our true priorities vs. our ‘stated’ priorities: We can say we love to eat healthy, but if Little Caesars pops up more than three times in a month, then…. hey, stop judging! You do it too.
- Small choices repeated lead to huge consequences later: This sums up the other points, but daily tracking helps encourage tiny good choices vs. tiny bad choices. Both types of choices lead to consequences. I’d rather have the good kind of consequence.
This week, then, I’m focused on keeping track of our spending on a daily basis. Every morning and evening, I’ll pull up my accounts and scribe the spending in my budget.
There are a ton of opportunities to let cash leak out. Disciplined tracking should help plug any leaks that have recently been springing. It’s one of those small daily habits that can lead to achieving larger, important goals.
Question: What is a simple practice you have to help you keep on top of your budget and financial situation? (Leave your response in the comments below)
Helpful Resource: Andy Stanley’s series ‘Balanced‘ from North Point Community Church. See especially the first sermon in the series, “Opening the Books”, where he talks of the importance of knowing exactly where your money is going.