I don’t keep my receipts. This was a decision I made a little over a year ago after cleaning out a wad of crumpled paper that filled the bottom of my purse. Why accept receipts from cashiers if I was only going to shove them in my purse and forget them until I couldn’t bear the mess any longer?
Unfortunately, this habit is a sign of a bigger problem. I not only don’t keep my receipts, I don’t pay very close attention to what I spend. Before you get any wild ideas, I feel like you should know I’m not exactly spending like a millionaire. Typically, after we get paid, I pay our bills, go grocery shopping, throw some money at our debt and then we spend as much as we want until the next paycheck rolls in. I grab a latte in the drive through, take my kids to Chik-fil-a, or buy something from the Gap clearance section.
I’m not an extravagant spender, but I’m not a responsible spender, either. I know not tracking my expenses isn’t doing us any favors. We aren’t really saving any money. There isn’t a rainy day fund and I keep pretending that our house doesn't need any work.
In my quest to make sense of my financial mess, I knew that I need to start here. I needed to take a good look at my finances and come to terms with what I am spending each month. My embarrassing admission is that I am afraid to get started. The way I am doing things may not be financially healthy, but it certainly is easy!
I decided to reach out for a little help. The typical methods of using Mint.com or even the cash envelope system weren’t sticking. I was feeling overwhelmed, always behind, always missing a receipt or forgetting to write down a check before I dropped it in the mail. I needed something simple, something automatic.
“Keeping your finances organized may seem like a daunting task, but it’s actually not that difficult once you find a system that works for you,” Josh Zimmelman of Westwood Tax and Consulting told me. “You should save and file all your financial documents, such as receipts, bills, statements, pay stubs, etc. Whether you want to store everything digitally, keep it old school with a file cabinet, or hire a professional to handle it for you, this information needs to be in order. You can use these documents to track your income and expenses, which are the basis of your budget.”
So, I started there: looking for a system that worked for me. I tried good old fashion pen and paper, but found it was too much to keep track off. I knew from multiple failed attempts at adopting the cash system that it was too inflexible, not allowing wiggle room for a lot of the variable expenses in my life. Ultimately, I decided to download an application on my phone so I could enter expenses as soon as I swiped my debit card. I tested a few out and found the HomeBudget application was the easiest for me to use.
Breaking the habit of thoughtless spend isn’t easy. At this point in the game, I am not trying to spend less, I am just trying to pay attention to what I spend. More than once, I have had to log in to my bank account and double check my balance because I forgot a receipt or even didn’t enter a bill right away. Slowly, it is becoming second nature and with time I hope to solidify this habit for the long term.
Keeping track of what I am spending is only the first step in a long line of changes I need to make if I want to consider myself financially fit. Still, knowing what I was spending gave me a good idea of where my money was going, information I need before I can create a budget.
Paying attention to where I spend my money also gave me an idea of where I can start cutting back. I wasn’t really surprised to know that I was spending a lot on food and coffee, but having it spelled out in front of me at the end of month will be essential as I start to form some goals for spending less so I can make progress on our goals.
And the biggest challenge as I started paying attention to my spending? Learning from my mistakes instead of beating myself up over poor spending decisions or my struggle to adopt this new habit.