My Money Mindfulness Method
When I was a kid, I would regularly count my money. I didn’t have huge amounts of money but I was always wanted to know what I had. I would put my different coin denominations into piles and then would put those coins into $1 piles to total how much I had. I found this fun to do. But, I wasn’t a miser. Like many kids, most of my spending when I was young was at the corner store, either on some type of candy or trading cards. As I got into middle school, candy and trading cards were replaced by saving my money for bigger purchases, such as a special piece of clothing in which I wanted to buy.
In grade 10, I decided that I would track all of my money for one year. This wasn’t something that was suggested to me. It was something that occurred to me that I could do and that I thought would be a fun personal project. I used a simple notebook and created a ledger that had four columns: date, item, income, and expense. At the end of each day, if I had received some money or had spent some, I would write it down in my money journal. I wish that I still had that book. It would be so interesting to see what it looked like. I do remember a few things from it. At that time for income, I received $5 per week as an allowance. Odd jobs, such as cutting lawns, would bring in some extra money. Birthday and Christmas were two big days when I was given some money as gifts. Throughout high school, I also received a bit of money if I earned good grades in my classes on my report card. (This was somewhat motivating for me to do better in school. As I reflect on it now, I’m not sure if this was a good idea or not but it is what we did as a family at the time.) For expenses, I don’t remember much specifically but the most revealing part of this process was being able to see spending trends. I do remember junk-food expenses being somewhat common. For example, I would buy ice cream treats at lunch time from my school cafeteria.
I abandoned using the money journal after that year but I think that it had a life-long impact on me, to some degree. I am certain that I became even more aware of my money, and my spending in particular, having tracked my money for that year. I was glad I did it.
Fast forward to 2019. I had become frustrated with some of my spending habits. I suspect my frustration had to do with the fact that I was aware of spending money but I wasn’t holding myself accountable in the way that I felt I needed to. My spending habits were just in my head but I wasn’t tracking it in any formal way. I decided I should re-visit my money journal habit from when I was 14 and see what I learned.
I discovered there were many apps that can be used to track your money. After a little bit of research, I decided to go with the free app, Pocket Expense. I really don’t know if this was the best one to go with but it seemed to be able to do what I needed it to do. There were other apps which seemed to be more powerful that allowed you to link up to your bank account and track every penny in your life, in or out. I didn’t want to do that, partly because I was uneasy about linking up my banking to an app, however, I can see the potential positive benefit of doing so. Primarily, I wanted something that I could easily track my discretionary spending to see what was happening. Anytime I would make a purchase when I was out and about, or if I bought something online, I would put it down in the app.
Like creating any new habit, getting started is always the trickiest part. The first step was to create the habit of writing down every purchase into the app. Having had my money journal when I was 14, I think I already carried this habit with me a little bit which made the process of starting this time slightly easier than it might otherwise have been. Still, when I began, I had to be quite disciplined to immediately put any purchase I made in the app. However, I found this really only lasted for about a week or so. After that, it just became part of my routine which making a purchase.
I use a credit card for all of my purchases to accumulate points for future purchases. Some people might say that I could just look at my credit card statement each month to see all my purchases and then I’d know on what I had spent my money. This is true but I have found that I don’t get the full benefit that the tracker gives me. The important part is the act of notating a purchase each and every time. It forces me to think a little bit more as to whether or not I want to go through with each purchase, especially if I notice a trend that I am making similar purchases on a regular basis, just as I found when I did my money journal back in high school.
Having done this now for five years, I have found that I spend less money on certain things than I used to. For example, I am much more aware of my spending habits on food. As a result, I am now more proactive about preparing lunch ahead of time before going to work rather than simply leaving the house and buying something at lunchtime. I also rarely buy snacks now when I’m out and about. I have found that coffee shops are places where a lot of money can be spent in small amounts which really adds up over time. When eating proper meals out, specifically, only a very small percentage of these meals are actually memorable. The vast majority of meals out are really just to fill the stomach and are quickly forgotten. Having become more aware of my purchases, and cutting down on eating out, I’m more committed now to make the times when I do eat out to be more memorable experiences. These times when I do eat out now are more of a special occasion which I find is a better way to spend my money on food.
Cutting down on my discretionary spending has also allowed me to open an additional savings account at my bank into which I make an automatic, bi-weekly contribution to save for bigger purchases. The great thing is that I don’t actually notice the bi-weekly deposit at all. After a number of months have passed, it’s rewarding to see the savings accumulate without too much effort or sacrifice.
Tracking my spending in this way has been well worth it and doing it through an app, such as Pocket Expense, has made it extremely simple and easy. Five years into doing this again, I have no plans to stop regardless of whatever my income is in the future. I think the benefit has been life-changing and I’m glad I revisited this habit that I started back when I was 14 years old.
David
