Let's Get Real About Spending

When I am working with clients, I always want to start with the reality of their current situation. We can’t know where we are going if we don’t know where we are starting! To understand reality, I ask clients to gather 3 to 6 months of recent spending for us to review, identify patterns and, from there, talk about what’s possible for paying down debt or adding a goal like a house down payment.

Reviewing where the money went is usually an eye-opening experience, leading to comments such as “Do you know HOW MUCH I spend at Target?” or “Is it normal for my Door Dash total to be more than my rent?”. If you make a regular habit of checking your spending trends, you can use this information to answer bigger questions like “Can I afford to take a pay cut for my dream job?” or “How much should I have saved to take a sabbatical?” or even, “What should my retirement goal be?”. Getting real about spending is also an opportunity to think about wants vs needs and whether the dollars you are spending line up with the most important areas in your life. Being intentional with money puts the power back in your hands… you unlock the ability to fund better life choices.

To track spending, you can use a tool like Mint (see our Mint tips in this previous blog post), or even just download and sort all your credit card and banking activity by month. If you want to see trends over time and make predictions about your account balances, check out the Smart Sister Finance Spend Tracker. There are instructions on the first tab of the workbook and we are always here if you have questions!