Track Your Spending, Don’t Budget – Financial Literacy Spending Series
This might sound different than the advice you are used to getting about your finances, but there is some sound reasoning behind it. Budgets don’t work because they are static and do not account for life and the unexpected costs you will encounter. Instead track your spending and create a spending plan.
Think of this like tracking your calories in a food journal versus dieting. Dieting is hard and often times results in failure because you are being restricted, feel like you are missing out, and are being deprived. A food journal on the other hand lets you analyze the calories you have consumed and burned so that you know where you need to make adjustments and you can control your eating. A spending plan is the same concept.
To get started
- Plan how you will spend your money
- Track your spending
- Compare your plan to reality
- Make adjustments and decisions about your goals monthly.
Spending plans allow for wiggle room so that if you take a small detour off your path you won’t feel completely defeated and give up. Instead you can look at the numbers, adjust and get back on course.
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One thought on “Track Your Spending, Don’t Budget – Financial Literacy Spending Series”
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I like the comparison between food journal versus dieting and Budgeting vs Spending Tracking. The part of your post that I relate to most is having a buffer. My wife and I have done well with budgeting but we found there was not much wiggle room then we concentrated on tracking our spending and included a buffer zone which allowed us to get more done financially with much much more enjoyment.