As a financial coach I am often asked how to save money when there is no money. You pay your bills, maybe splurge on some takeout and a little fun, but then you’re living on $5 for the next 10 days till you get paid again. In this situation, I always start with the same question, where is your money going?
This should be a simple question to answer but most of us cannot give an accurate answer. In fact, 90% of us cannot tell you where our money is going. Living in a world of digital technology has brought great advancements but it has disconnected us from our finances. We can pay our bills from our bathroom throne, spend hundreds of dollars in a single swipe or tap, and can even set up recurring payments. It’s wildly convenient, but it also means your money could be going places that you’re not even aware of!
This seven-day challenge is set up to help you see where your money is going and why. It puts you back in control and telling your money where you want it to go.
So grab a small notebook, scrap paper, or anything you like to track your expenses for the next 7 days.
Here are some ground rules to follow:
- Do not leave home without your paper and pen.
- Be honest with yourself.
- Do not change your spending habits for this challenge. NO MATTER WHAT!
- Did I say BE HONEST with yourself? (Yes, this is the most important!)
When you leave your house, you start tracking. Stop to get a coffee? Track it. Had a bagel with the coffee? Track it. You do this for every cent you spend for the week. This can seem tedious, but it will be well worth it in the end.
If you think that you might forget something or do not have time or are too embarrassed to track your expenses in public, ask for a receipt and track them when you get home. Throw an empty envelope in your pocket and every time you swipe or tap that card, just say “can I have a receipt, please?”. The clerk may seem shocked at first, but they can give you a copy. Each day when you return home track your expenses on a sheet of paper and toss your receipts in the shredder, unless next week you have buyer’s remorse and may want to return something.
After doing this for a few days it will seem normal and just another habit, and that is what we want. We do not want you second guessing your purchases. The purpose is to see what you are spending. And just a reminder, we mean “leave the house” in a metaphorical sense. If you’re still working from home and Uber Eats in sushi for lunch, mark it down. If you get bored and buy something on Amazon, add it to the list.
Once you hit the 8th day, I want you to sit down and look over all the expenses. Do you notice anything that surprises you? Break your expenses into categories, ie: eating out, gas, groceries, alcohol, etc. Did you realize how much that coffee and bagel was costing you every morning?
If you do not have any surprises, congratulations you’re on the right track and you are telling your money where it needs to go. If you had surprises, it’s time to make some changes. Remember we all want to be “living our financial dreams our way” so only you can determine what needs to be changed, if anything.
If you liked this challenge and are interested in digging deeper to see how you can save more money, check out our resources page for an instant download of our 3-month bank statement challenge. Remember, a $1.99 unused subscription can add up to a potential loss of $4,558.35 if not caught!