I will first off clearly state and admit that I like numbers. I may be what people refer to as a “numbers person”. Be that as it may, the idea of tracking every penny that came into and went out of our household was an intimidating one, to say the least. But what began out of desperation to make some sense of why we could never catch up has become an exercise in learning about how to treat money wisely, all because of a simple concept. Tracking our money makes the abstract concrete.
How many times have you made a rough estimate in your head of what you’ve spent that day, or that week, or that month, on a certain type of spending, and been completely wrong? Maybe it’s gasoline, maybe it’s food, maybe spending on clothes or items for the kids. If you are like me, you’ve done it hundreds of times – you think you’ve only spent a little, but in actuality, you’ve spent a lot more than you thought. I used to not even keep track of how much I spent on gas – I figured it was unavoidable so I didn’t pay attention to how much I spent. Which makes no sense to me now, but at the time I just did it. It’s a wonder I never bounced a check.
In the past, right after my spouse got paid, and I paid the bills that I had allocated to that paycheck, I would feel one of two things. Either scared, because we had no money to speak of for the next two weeks, or elated, because we had more money than I thought we would. And if I was in the elated category, it somehow gave my brain a license to spend. I never thought I spent a lot, just a little here and a little there, saying yes to going out to eat once in a while or taking a trip to Target to check out the clearance buys, but it did add up, and I’d check our bank balance and go back to feeling like we wouldn’t make it to the next paycheck.
Enter budgeting and tracking our money down to the penny. Doing this, I made a discovery that frankly shocked me but won’t surprise anyone else – I spent a lot more on small miscellaneous purchases than I ever would have imagined. All those $10 here and $15 there added up to $100 or more each month. No wonder I never felt like we could get ahead at all. Tracking our spending has helped me make actual choices based on our priorities about how we spend our money instead of just spending now and thinking later.
On the flip side of that, tracking our spending has also shown me exactly how much we pay towards debt over time, and how much more we need to pay to be out of all non-mortgage debt. If someone had told me 11 months ago that I would spend $15,000 on something, in cash, by the following May, I would have laughed. But in actuality, that’s exactly what we’ve done. We’ve paid about $15,000 to debt since last June. I would never have thought we’d have $15,000 to spend on anything. That is a whole lot of money in my world. And yet, we’ve done it – and the scary part is, we still have over $20,000 to go until we’ve paid off all our non-mortgage debt! Yikes. That is a whole lot of debt and a huge amount of money. Keeping track of this has really made the abstract concrete and also shown me that once we are done paying off this debt, we really do have the means and ability to make our financial dreams a reality. I am really looking forward to being able to put that $15,000 (or more) a year to work for our future instead of our past.
Our finances used to be this abstract concept to me and all I knew was that we had very little to speak of. Through keeping track of our money, it has become a concrete thing that we can and actually are improving bit by bit, every day.