Do you have a way of tracking your money? Do you write things down, use an XCEL spreadsheet, or an online tracking site like MINT.com (not an affiliate)? Are you using it effectively? I ask these questions because at the beginning of January I spent several hours going through my MINT.com account and discovered something that I didn’t expect-$4,464 dollars in unaccounted for funds from 2013!
Let’s be clear, what’s so incredibly disturbing to me is that I spent the last year becoming a lot more conscious about where my money was going and what I was doing with it. What happened the previous years? How much money did I lose sight of throughout the course of the years before 2013?
As I tighten up my finances I learn that the saying “small leaks sink big ships” is so true! In the past year I have increased my monthly cash flow through developing an awareness of every transaction that involved money.
The $4464 in unallocated expenses were primarily ATM withdrawals. I wasn’t shopping last year, I didn’t really go out, or go out to eat, where the heck did the money go to?
So, I’m left to speculate. Here it goes.
- At least $1,464 went to the various trips that I went on. Maybe I spent up to $2,000. I did take a lot of cash with me to London, St. Louis (Twice), Montana, and NYC.
- The rest-I’m not really sure.
The lack of clarity on this line item leaves me about frustrated and a little irritated. Because of this oversight I’ve changed how I approach using MINT.com.
- I now check weekly for misallocated expenses
- I am using a hybrid envelope system and taking care to label my cash withdrawals. I get paid once a month so I make a large number of withdrawals the first couple of days of each month.
- Label my walking around money and grocery money. I tend to make more than one withdrawal a month for these two line items. I’m trying to make sure that I’m not frittering away my money on little things through out the day. So, this is an area that I really want to focus on going in to 2014. I’m thinking about withdrawing more money for groceries and walking around than I have been for the past couple of months. That would eliminate the number withdrawals that I have been making.
The truth is a budgeting tool is only affective if you know how to use the tool to its fullest potential and use it properly. Whatever tool you use, spend some time learning the ends and outs of the tool and set time aside each week to use that tool so that at the end of year you don’t have a nasty surprise like I did.
This year is looking to be a big year for me professionally and personally. I am really focused on keeping my expenses low and the budget leaks from happening. I’m hoping that the changes to how I’m using MINT.com will make a huge difference to my bottom line. I’ll let you know this time next year!
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This is partly why I don’t spend in cash. Can’t track that stuff.. although it’s a moot point because I just track it in my budgeting tool in Excel and make sure I account for every penny coming in and out.
Otherwise, at the end of the year I’d be thinking: where the hell did I ….
I just decided to create a line item called “Walking money.” How I spend that money doesn’t matter because it will go towards the daily things I like. For example: coffee out, happy hour, or a book. I like this system because I don’t feel like I’m being punished for being mindful with my money. So, at the end of the year that line item will be a better reflection of my discretionary spending.
ugh I hate that too! It’s funny because I went to the doctor last month and paid my $40 co-pay. They then sent me a $40 bill. Huh? Back in my old days I probably would pay the bill without questioning it, but I called and it took me days to get a hold of someone, and they said oh yeah ignore that. It makes me wonder how many times they get away with that crap. But that’s how leaks happen. Keeping a really keen eye on your finances…although tedious and possibly time consuming, can really tighten those loose ends up! I actually may not go to fincon this year. If I don’t get a roommate I decided that I spent too much last year rooming by myself on top of food/drinks/etc. Im already hitting a slow down with freelancing so I have to be really careful this year if I want to stay on top of retirement savings.
I was really surprised by the number and kind of bummed out because I had been working so hard to get my expenses cleaned up. It goes to show, that there is always more to look at during the process of cleaning up and shining a light on one’s finances. I’m pretty sure that you will very easily find a roommate. I’ve already seen a couple of requests put out. I will forward them to you as I see them.
I must admit I’ve not been great about tracking expenses since we got back but definitely trying to keep on top of them this month. My bank is awesome – I have never seen any better online banking tools. It has sort of like Mint-style software built in – so I log on, can make payments, see transactions, and CATEGORISE them. That’s how I track my spending – log in every few days and categorise the hell out of everything. There’s even graphs and all.
The key is categorizing!! I thought I was being diligent with it last year, clearly I wasn’t. This year I’m on it. I refuse to have that kind of surprise again.
I’m the worst at tracking expenses! Starting in March, I’m going to try to be more hands on by using YNAB, which I hear is awesome. I’m just not a huge fan of MInt!
I think that as long as you have a process that works for you-you’re good!
I use an excel sheet and input everything by hand. That way I know what it was for and where it went! I tried mint before and didn’t love it. Yes, my way has more labor, but it works for me.
It doesn’t matter how you do it as long as you’ve got a process in place. I can’t believe how disorganized I was with my finances before the last couple of years. I totally understand why I was always in the financial hole-I had not clue what was going on with my money.
I’m pretty religious about tracking everything on my spreadsheets (well, now), but I wish I started sooner. I caught a lot of leaks last year and cringe at how much more I lost in previous years. Best wishes on finding your leaks, I would be curious to know what the outcome is for this year!
Each time I discover a leak like this one I feel like it’s a pal to forehead moment. Doh! I always wish I’d caught these things sooner but I didn’t all I can do is focus on today and the future. I’m also curious to see the differences in my expenses by the end of the year. It will be interesting.