Money plays such a huge part in our lives, it affects nearly everything! From what and where we eat to clothing, transportation, extras…
Do you plan where your money goes based on the resources you have, or do you spend mindlessly – hoping you’ll have enough or that you can figure it out/worry about it later?
Let’s take eating out, for example.
Life is hectic and preparing food at home necessitates planning ahead. At the end of a long day, if you don’t have any groceries in the house and have no earthly idea of what to make, it is so much easier to just grab something and be done with it! However, eating out can be expensive. And, if we’re making a habit of doing it frequently, we may be spending a lot more than we think in this area.
Vacations are another great example.
Much of what we see and hear conditions us to believe that we should all be taking them, and frequently. We deserve it, right? But, where should we go? And, what does that look like? Can we afford it, or will it go on a card? This is an area where many of us quickly and easily spend beyond our means.
None of this is to say we should never eat out or treat ourselves to some time away. I am simply suggesting that we pay attention to our spending habits, both in the small day-to-day items and when it comes to those larger one-of-a-kind expenditures.
Given the incredible impact our finances can have on our lives, shockingly, most people do not track it or have any idea where theirs is going from week to week, let alone month to month and year to year.Given the incredible impact our finances can have on our lives, shockingly, most people do not track it or have any idea where theirs is going from week to week, let alone month to month and year to year. Click To Tweet
No shame if you find yourself in that majority who aren’t keeping track. But, can you imagine if you were, and the freedom that would come from living beneath your means—telling your money where it should go, instead of wondering all the time where it went?!
Is saving difficult for you?
If so, it means you are likely living beyond what you can afford. And, you might want to look at some areas you can pare down so that you can start building an emergency fund, retirement nest egg, etc. If you would like to be in a better place financially than where you are now, you must get your spending under control and start saving!
It’s not how much you make, but how much you save that is the biggest determining factor in building wealth.It’s not how much you make, but how much you save that is the biggest determining factor in building wealth. Click To Tweet
If talking about money pushes some buttons for you, delve into that and figure out why. If you are feeling deflated or overwhelmed when it comes to managing your money, believe me, I understand (I have been there too). But, burying our heads in the sand will not give us the financial freedom we crave or help us get to where we want to go.
So, where to start? Start by paying attention to where all your money is going.
You can do this in whatever way you choose – there are a lot of resources out there—but my favourite is YNAB, You Need A Budget. If you’d like to check it out, click here for one free month, after that it’s just $6.99/mo. It may seem counter-intuitive to spend money when you’re trying to save, but this minimal expense is worth it!
On average, new budgeters save $600 by month two and more than $6,000 in the first year.
Once you start to track your spending, remember that knowledge is power – no matter what the numbers show. Figure out whether you’re living within, but hopefully below your means. And, start to build some wealth by saving. Savings are especially beneficial when you figure in the power of compound interest, which I will talk more about in the weeks to come. Or, you can hop on a free call to learn more at any time!
For more on this topic and lots of others, check out my YouTube channel KT Finances. Here’s the video accompaniment to this week’s blog:
As always, sending you tons of light and love.