I’ve never been great with money, and up until recently, my wife and I had no clue about how much money we had, how much we spent, or how much we owed. Income was automatically deposited, automatic payments were set up for nearly every bill, including rent, utilities, and most of our charitable giving. Cash was withdrawn when needed, and checks were written occasionally. Easy come, easy go, right? We never argued about finances because we never really knew how much was coming and going so easily. Our lives ran perfectly smooth this way. Yet, there was a level of discomfort that came with such cluelessness. So we agreed to make a change.
In January we signed up for an online money management tool. It took us a couple of days to input the relevant information and link our various accounts, but we soon had every transaction we’d made over the previous three months in plain view. The number of times one or the other of us said the words, “Wow. Did you know we spend X on Z?” cannot be counted. Some of the revelations were stunning. Others were rather embarrassing. Given this wealth of data, we dutifully categorized our expenses and created a monthly budget. We set up some savings goals. And we resolved to track every dollar for an entire year. Thus began 2012.
It’s been a little over a month now that we’ve been using this money management system. We’re still occasionally surprised by things, and we’ve adjusted our budget a few times in order to not feel bad about ourselves for splurging. But for the most part, we’re both much more conscious about what we’re buying. We think twice before going out to dinner when we could make a perfectly tasty meal at home. We’ve cancelled a couple of our monthly subscriptions to clubs and programs that we weren’t fully utilizing. We’ve become more strategic about our discretionary spending, looking for deals and discounts wherever possible. Now don’t get me wrong. We haven’t become stingy. We still enjoy the things we’ve always enjoyed, and we’re still huge proponents of buying experiences over stuff. But the gaining of financial clarity has made us more appreciative of how and what we consume.
How much financial clarity do you have? Take our survey on Money Management to learn about your own spending, debt, and savings patterns.