Financial Freedom Step #1: Collecting Data/Tracking
Starting the journey to financial freedom can be daunting. I know when I first started budgeting and working on my financial goals I was impatient, frustrated and felt hopeless. But with time and practice I created a budget and plan that worked & allowed me to accomplish my goals.
Today we are going to address the first step: Collecting Data/Tracking!
Read the rest below & check out the my video!
Without knowing where your are starting, you will never be able to put an effective plan in place. I know, I know...you "think" you know where your money is going. I have news for you, unless you write down EVERY LITTLE THING money is leaking somewhere and if you want financial freedom its time to face the reality. It's tough, but you can do it!
Here are 3 ways to start Step #1: Collecting Data/Tracking
- Digital. I prefer this method. I use the Checkbook Wiz app to input every penny we spend. Since 99.99% of our purchases are done via debit card this option works best for us. I set up the spending categories I needed and input every transaction (bills, expenses, deposits). At the end of the month I can see a report of where our money went.
- Paper. If you like to see things in black and white, pen & paper is the way to go. This option takes more diligence in my opinion as you need to be disciplined about writing down every penny you spend & then you must take the time to manually calculate your totals for your spending categories. A few ways to do this could be tracking purchases in the notes section of our planner using category columns, tracking daily purchases in a designated section of each day in your weekly spread, or tracking weekly purchases in the sidebar of your weekly spread.
- Excel. A mix of digital & paper so to speak. You can track your purchases in your planner and then transfer that data to a spreadsheet in Excel that will calculate your totals for each category.
No matter which data collection method you choose, this step is essential to gaining clarity & insight about where your pennies are going. The key here is categories! If you just tracking purchases and are like "Oh sh*t I spend $1000 more than I thought this month" that won't get you anywhere. You need to know specifically where you are potentially overspending or where you can make small adjustments to improve your spending.
So you are probably wondering "But Jess what stickers can I use, I LOVE stickers!" While I obviously love stickers too, I am not a big sticker user when it comes to finances. I have found that tracking my finances digitally and in my excel spreadsheets has lead to my greatest success. But if you are wanting some sticker ideas to help with Step #1 of course I have some ideas for ya!
- Dollar Sign stickers (circle, corner or hexagon). You can use these daily as a reminder to track your purchases or to input your transactions in your spreadsheet.
- Habit Trackers. You can use a weekly or monthly habit tracker to keep you on top of inputing your transactions/purchases daily in your chosen method.
- Expense Trackers. We just launched our new expense tracker for your note pages. This sheet allows you to track all your purchases based on categories!
- Bill Trackers. We have sidebar bill trackers and individual ones. These can help you stay on top of paying those bills on time, but remember I still need recommend you record bills in a spreadsheet, app or document you create with categories.
Once you've spent 1-3 months really getting clear on where your money is going we will head to Step #2: Creating a Budget! Stay tuned and start tracking!