Improve Your Spending

The 4 Actions That Improved Our Spending

For a number of years, Pamela and I could not get a handle around the money we had coming in as opposed to what was going out.  No matter how much we made, we would spend more than what we had in hand.  It was like someone was taking funds out of our accounts without us knowing.  It was like having a purse with a hole in its bottom.  No matter what we did, we were always short.  No matter how much money you have, it’s less than what you think.  

We needed a plan of action that was different from anything we’d done before.  Any time you repeat a process, you can be assured that the results don’t change.  So we needed a different approach.  Because we are people of faith, we tried prayer, prayer didn’t seem to be working to correct this problem. At least not until we prayed differently for a new method to account for what we had.  Our prayer then became how can we improve our spending trends?

How can we improve our spending trends?
First, you can’t improve what you can not monitor.  We needed a way to see and account for our spending patterns.  Where is the money going?  This led us back to Mint, such a great tool.  Before we get to the specifics, keep in mind that prayer alone isn’t always enough and neither is faith.  They both need something from you, action.   Faith [and prayer] without any actions produces nothing.  There’s some work you must do.  In this case identify the trends.

Find out where all the money goes.
Where’s your money going?
Mint has a feature that allows one to see their spending trends in a pie chart or bar chart.  You can see the whole pie and the pieces will indicate in what areas you spent your money.  It’s always a surprise to see that most spending occurs [not in bills] in shopping.  Seeing the trends will cause you to think differently and eliminate areas of waste.

Evaluate the intervals of your spending.
How often are you spending your money?
Trying to calculate your spending trends by hand is almost impossible today.  The transactions are never ending.  So you really need a tool like Mint that can help you see the intervals of your spending.  You can then and only then take action to improve it.  Mint lets you review spending in various time intervals (last 7 day, 30 days, the past years and custom intervals).

Place your spending transactions into meaningful groups.
What makes up your spending categories?
Mint groups your spending into categories, so that you can see by grouping whether fuel, groceries, coffee, etc. is the cause of your spending pain points.  Using Mint’s Trend pie chart, you can click on the pie piece of your interest and drill down to individual items.  Not only can you see by category, you can see by merchant which is very insightful.  Do you know how much of your money Starbucks is getting?  How about Walmart?  One of our biggie’s is Chick-fil-a.  You will be surprised at how those small purchases add up to ungodly amounts in a month’s time.

Create a plan of action to make adjustments from the patterns.
What can you deduce from what you’ve noticed in your spending?
For Pamela and me, it was that we had more than enough to pay our primary bills, but we made frivolous shopping more of a primary.  What Mint or the above steps was able to show us was that we had enough, we just used it unwisely.  We made the wrong groupings the priority.  Actually we had no priority; no plan means you plan to fail and fail we did.  So we made a plan to reverse the order.  We made bills the priority and not our miscellaneous spending.  It was just that simple.  

It’s time you look at where it’s going, when you’re spending. It’s time you group the spending, and use this information to make a plan.  Planning is everything.

Today is Friday!
At Kerry A. Clark & Co, our goal is to provide tips that will lead us all to doing “The Business of Running Our Life” better.  In this message, we’ve discussed 4 simple actions you can adopt that will lead to better spending habits.  Let me know what you think and any questions you might have.  Leave us a comment.

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