You will need a pocket-size notebook and pen or pencil for this exercise. Yes, you can use the notes section of your smartphone but I’m at the age where I’m caught in the middle; I love the convenience of technology, but I still need paper for certain tasks. Pick the method that works best for you because for the next 30 days I need you to write down EVERYTHING you spend money on besides your regular monthly responsibilities. Pick yourself up off the floor! This will not kill you; I promise. Seriously though, you will be surprised at just how much money you, do I dare say, waste. I was shocked and embarrassed when I did this challenge. In fact, I should probably do it again!
So, here’s the deal. The morning drive-thru, write it down. The snacks from the vending machine, write them down. Lunch and/or dinner at a restaurant, write it down. If you buy a newspaper or magazine, including digital copies, write it down. Ladies, your nail, hair and tanning salon visits need to be written down. Guys, your round of golf, custom parts for your hotrod or motorcycle, and wood/supplies for your latest hobby, write them down. The music downloads, write them down. The gum and/or snack you bought from the gas station when you filled you tank up this week, write it down. If it helps, ask the clerk to ring them up separately. We shop in stores that have literally everything we need these days making it difficult to track our needs vs. our wants. Some of my clients separate their purchases by category when they shop in these stores in order to track their spending. I’m not saying you necessarily need to do that but if you want to get a handle on what you are spending on monthly cleaning supplies, this might be an easy way to do it. NOTE: This challenge is not just to track your cash spending. If you are purchasing the above items be sure to track them whether you pay with cash, debit or credit card.
Let’s spend a minute on things that don’t get tracked in this 30-day challenge. Groceries do not get tracked (restaurant, drive-thru and take-out do). Do not track your cleaning supplies, toiletries, utilities, fuel, car maintenance, mortgage/rent payment, car payment(s), student loan payment(s), credit card payment(s), insurance, taxes or monthly subscriptions. These are evaluated in my Dropping Nickels post.
By now, you may be curious about what we are going to do with this information once we have it. Let me set your mind at ease. You do not have to stop eating out, going to the salon, playing golf or listening to your favorite music. The challenge is to identify opportunities. Instead of eating out 5 days a week, maybe you alternate 2 days one week and 3 the next, potentially cutting that expense in half especially if you have leftovers from the night before you can pack for lunch the following day by simply adding a little discipline to your life. NEWSFLASH: You have to want to be financially responsible! It won’t happen by itself.
That’s the challenge! Simply write down what you purchase every day for 30-days. By the way, do NOT change your spending habits for this exercise. If you do, you are only cheating yourself. If you normally get a bag of chips and soda from the vending machine every morning don’t stop because you have to write it down and DO NOT total anything up until the end of the challenge.
Once you have completed the challenge and tallied your spending, if your budget is not balanced, I strongly recommend you cut this miscellaneous spending by 50% and apply this “found money” to an area of your budget that is otherwise hemorrhaging. If your budget is balanced, we will discuss how you can reduce this spending by 50% and leverage the savings to cover multiple needs in a future post.