In this blog series, I am examining 5 tasks that you can complete in 5 minutes each to improve 5 different areas of your finances!
I know that many of you need help with reining in your spending and figuring out what to prioritize financially… but you struggle because you just don’t feel like you have the TIME.
I totally get it. Life is BUSY. Life costs MONEY.
BUT EVEN with small bits of continuous dedication, you can still move FORWARD. Even if you only have FIVE minutes every week… Those 5 minutes have a compounding effect.
5 MINUTES PER WEEK ADDS UP TO FOUR HOURS AT THE END OF A YEAR…
5 MINUTES PER DAY ADDS UP TO THIRTY HOURS AT THE END OF A YEAR…
let that sink in.
It’s time to find the facts.
If you want to be the boss of your budget, you can’t do it by using numbers you THINK are probably correct. They won’t be. Any time I ask someone who has never budgeted how much they THINK they spend on, say, groceries… they are usually way off the mark. You gotta look at the cold hard facts. Ideally, you would go through one year of financial statements (to catch any of those irregular costs), including any card that you spend money from… but for this 5 minute exercise, one month will do.
If you use cash to spend, this will be difficult to track if you don’t keep receipts. In my experience, it’s usually best to use a debit card for all your transactions, so that you have a record.
You can use an app for this, if you like. Some people find great success using Mint or YNAB. If you’d rather use paper, you can print off your statements and use a different coloured highlighter for each category.
I want you to categorize your spending into the following:
- Housing costs (mortgage or rent, property taxes, municipal fees, garbage/recycling, hydro, heat, water, electricity, home insurance, content insurance. Anything directly related to your housing. You may choose to put internet and phone under here if you deem those necessary.)
- Groceries (do not include anything you deem as above and beyond normal groceries, like luxury beauty products or additional items you buy that don’t fall into the groceries category. In fact, when I go to Costco, I separate my actual groceries from the things that would fall into other categories.)
- Transportation (gas for the car, car payments, auto insurance, parking fees. Do not include maintenance.)
- Insurance (Life, CI, DI insurance) You may choose to categorize home and auto insurance under this category instead. Whatever works for you!
- House Maintenance & Car Maintenance
- RRSP/RESP contributions
- Debt Repayment installations
- Registrations / Tuition / Childcare (kids sports activities, private school, before and after school care, daycare)
- Lifestyle (anything that doesn’t fall into one of the above categories)
You can’t make a budget out of unicorns and rainbows… don’t pull your numbers out of fantasy land. Look at your financial statements.Lindsay Plumb
Add up the total of all those categories. Are you surprised by anything?
Money Area: SPENDING ANALYSIS
- If you don’t have a plan for your money, you are definitely going to OVERSPEND.
- Every dollar you overspend is a dollar you are ROBBING from your future self and your goals.
- The more accurate your spending analysis, the better you will be able to set up your future budgeting plan.
You can afford ANYTHING. But not EVERYTHING.Lindsay Plumb
I would love for your to hop in to my free facebook group “Make Your Money Pretty” to share your results with other crazy-busy-moms like yourself! Why? Because then you’ll see that you are NOT alone and that other people have similar struggles. You will also get to learn solutions from other people in your shoes! Y’kno… solutions that actually might work for your crazy family lifestyle, rather than the complicated time-consuming strategies that many financial gurus expect you to learn.