Latest posts by Kumiko Ehrmantraut (see all)
- The Financial Boundaries Mindset that Will Change Your Life - April 8, 2021
Back in March, I realized that my budget just wasn't working the way it should. I was consistently overspending in many categories, and I felt like my money “plan” had lost all sense of direction. I knew I was spending way more money than I should and the question started coming up, “Where is my money going?”
The only way to get my budget back on track was to figure out exactly what I was spending my money on. So I came up with a crazy plan to track every purchase I made for the whole month of April. Not only did I decide to track every penny I spent, but I also wanted to give my readers a chance to get involved.
I created the April Spring Spending Challenge, and readers from all over the country joined me in tracking where every penny was spent for the entire month.
Now that the month of April has passed, and after looking over my spending tracker, I am a little shocked with the results. I guess you can say; I found my problem areas.
For the month of April, I had 151 expenditures (WAY more than I thought I would have), and each one was entered onto a paper spending tracker which is a part of my Budget-by-Paycheck Binder System. For the challenge, I gave every reader free access to the spending tracker so they could complete the challenge.
Here is what I learned from tracking where I spent every penny for an entire month and what changes I have made since the challenge ended.
I realized tracking every penny with pen & paper is a lot of work, but it's so freaking worth it.
I have always been old school when it comes to my budget. I hardly ever use online applications or software. I usually try it for a few days, and then always resort back to my old habits. It has been awhile since I have tracked my spending and documented every expenditure. So, when I started this challenge, I started out using the tools I was already comfortable with – pen and paper.
For the first few weeks, it was fine. Towards the middle of April, I caught myself on many occasions being lazy and not wanting to put in the effort to write it all down. There was one thing that made me push through it – YOU! Since I was sharing my progress with the nearly 300 readers and followers in TBM Family, I knew I had to keep myself accountable. People just like you were counting on me, so I pushed through it.
I am not going to lie. There were a few times where I caught myself on a Netflix binge-watching session, not wanting to put in the effort, but then one of your thoughtful comments or encouraging emails would enter my mind. I started TBM not only to share my journey, and to help people, but to keep myself accountable on my own journey as well. My readers give me that accountability.
I tracked my spending on the Spending Tracker from my Budget-by-Paycheck Budgeting System. I have used online applications in the past to track my spending, such as Mint.com, and for me, it just didn't work. Sure, it let me know which categories I was spending in and spit out cool pretty pie charts, but to be honest, it never made me question my spending. It's like it had the function of doing a little, with some data I didn't really use.
I'm not saying it wouldn't benefit some people, but I know myself, and I need something way more hands-on that will allow me to be active in what I am trying to achieve. Recording every purchase every night made me question what I was spending my money on. Before you know it, I was actively searching for ways to save money. I was no longer looking at swiping my debit card as just another expense, but money that was gone from what I had left to spend for the month of April.
I am a brand name junkie, and I need to stop it!
As I tracked my spending every night, I noticed one thing that a lot of receipts had in common – expensive brand name purchases. When I go to the store for yogurt, I don't just buy the generic brand Greek yogurt. I go straight for the most expensive Chobani Greek yogurt. Why? I have no freaking clue! I have pondered this question a lot since the challenge ended. I have always gone for the brand's that are “known” to be the best. Most of the time that means they are usually more expensive. Sometimes even double than the generic brand.
So I started making a conscious effort to break from my norm. Instead of just going in and buying the brand that I wanted, I took a few minutes to look around. My food budget has always been a struggle for me. I never got into couponing, I am horrible at meal planning, and I always find myself overspending in this category. I started buying things that were on sale, or the generic brands of the food I bought most often. To my surprise, there was no real difference. I still enjoyed my Greek yogurt in the morning with my granola. I still had a hot cup of coffee in the morning. My whole-grain bread was just as good for lunch, and I couldn't be happier with my switch.
Even though the challenge has ended, I am going to start putting this new mentality towards other things in my life. My brand name obsession just isn't with food. It also controls other aspects of my life. Something that I am now aware of because of the Spring Spending Challenge.
Just because it's a Brand Name and costs more, doesn't mean it's better or worth the extra money.Click To TweetMy budget got a badly needed makeover.
There have been a lot of changes in my life the last couple of months (an article topic for another time). I knew my budget was no longer working the way it should, but I needed to pinpoint what changes I had to make. The only way I could figure out what needed to be eliminated, cut back, or added was to find out what exactly was happening with my budget. Where was my money going? Where did I need it to go?
I finally sat down and got realistic with my food budget. Trust me when I say, there are plenty of more important and valuable things I would rather spend my money on than a nightly trip to the grocery store. Fun activities with my son, cutting down my student loan debt, an all-cash vacation are just to name a few. So, with my new generic brand mentality and actively searching out sales or discounts, I am hoping to shave off about $200 a month from my food budget.
Another thing I realized from The Spring Spending Challenge is that health and fitness mean more to me than I thought. At least that's what my spending is telling me. For the month of April, I spent nearly $200 on a gym membership, supplements, and trips to Walgreens. To be fair, I did develop a severe adult allergic reaction to one of my facial products. This new allergy sent me to the store on numerous occasions for new products and prescriptions. I have decided to reduce my emergency savings to offset my increased health and wellness budget.
To some, this may sound like a crazy decision. For me, it just makes sense. I already have my $1,000 emergency fund in place, and I will still be saving a significant amount every month. When creating and working with a budget, you have to remember that your budget works for YOU. It's a reflection of what you think is important and valuable. For me, running, working out, and living a healthy lifestyle is at the top of my list.
If your budget doesn't allow to allocate money towards things that make you happy, it will fail. Click To TweetI went into The Spring Spending challenge expecting to find out things I already knew. The truth is, not only did I learn way more than I thought I would, I was so wrong about everything I thought I knew about my spending. If there is one strategy or tactic I can suggest to you to improve your money, tracking your spending is it (manually if you can stomach it).
Here is what Brandy had to say about participating in the The Spring Spending Challenge.
I just wanted to say THANK YOU for hosting the April challenge! I did a modified version that fit my needs, and I got a late start, but I have had great success. Here is what I accomplished: I finally did get a cash system in place for food (groceries and eating out), toiletries, gas, and fun/other. I haven't been 100% in keeping the money in the right envelope (moved some around), But I did better than expected, and plan on getting better. Overall, huge improvement on “food” budget. Huge. I also did a deep dive into my finances and debt, and came up with a way to get all of my mindless spending (credit cards) debt paid off in 6 months, while having a small cushion to fall back on in case of emergency. I am also committing to doing bills and budgeting and analysis once a week on Sundays. Seeing progress and knowing what I have to spend and all of that is very motivating. I am also tracking “unplanned expenses” and “Off budget” expenses to see how to deal with those in the future. So thank you, thank you, thank You! I probably wouldn't have gotten started this much without your challenge. – Brandy Higgins Cohen
Even though we completed the Spending Challenge in April, you can complete this challenge any time. Don't be afraid to ask for support inside of TBM Family, and we will cheer you on the whole way. Maybe another Spending Challenge is in the future?
Have you tracked your spending before? What did you learn? Let me know all about it in the comments below. I want to hear about it!
Great idea! I need to do revisit my budget too. I have gotten really relaxed with my budget since there are so many softwares out there that does the dirty work.
Thanks Nicole!
We track EVERYTHING… but not with paper and pen. We’ve used Quicken since 2003 and it has worked our great for us. We love the flexibility in the budgeting tools.
I heard Quicken is a great tool. I say “as long as it works, stick with it.” 🙂
I’m glad you were able to see where the money was going and made the budget work for you! Sometimes I wonder the same thing and freak out when my expenses go over what I expected. We use credit cards which we pay off every month to track our expenses. It’s not perfect, but it’s rare that we blow it up in a way that lands us in debt.
Thanks for sharing the tips!
Thank you!
Budgeting your monthly expenses is really a great idea. This seems to be helpful in tracking our savings and expenses. We can even track necessary expenses and lavish expenses. This helps in enhanced budgeting for next months.
Thanks Kalpana!