Apr 21, 2009
Check Your Spending Habit
Aside from myself, all people I know wants to be financially free. This is doable, but aside from the strong desire, we must be willing to alter our spending habits. To attain financial freedom, just like other goals, we must have a plan or blue print of our courses of action to get there.
On our quest for financial freedom, the first order of battle is to understand our spending behavior and know where our money is going. I don’t know about you, but not too long ago, I don’t know exactly where 20% of my money is going. Wifey sometimes, thought something’s fishy, because I really can’t explain, I lost track of my money. Ha ha.
So I made a spreadsheet using Numbers (Mac’s counterpart for Excel) to monitor this.
I have a daily expenses monitoring sheet which I diligently update before I go to bed at night. I keep track of my spending before I forget it, yes even to the smallest centavo.
This sheet is conveniently linked to my semi monthly financial statement. In this way, I know whether my “to date” expenses is still within the allocated budget.
And the financial statement sheet, on the other hand, is linked to my bank account sheet. This in turn, helps me monitor if my spending behavior is draining up my savings or adding more to it.
After about 2 months, this project gave me a clearer picture of where my money is going. The (unnecessary) expenses that are eating my resources were (1) parking fee (2) gasoline for the SUV (3) fast food (4) pasalubong for kids and (5) tip giving. From here, I made a conscious effort to adjust my spending. Like using more often the smaller car that saves me P 1,500 per 2 weeks. I believe if I can save more money, I will have more resources that I can use for investment in the future.
As soon as we realize our spending behavior and know where our money is going, we can start altering our lifestyle and live on a realistic budget. Our daily victory over unnecessary spending will lead to more savings. And in turn, more savings will give us the means to make prudent investments that can increase our (semi) passive income. This is the ultimate goal: Make our money work hard for us, and not the other way around.
If you want a free copy of my daily monitoring sheet, just subscribe either by feed or email to any of the blogs at Santos.PH , then let me know by email at cnr[at]sesantos[dot]com[dot]ph and I will send you a copy.
Enjoy your trip to financial freedom.
I thought about doing my own spreadsheet, pero natatakot ako madiscover na lagi akong over my head sa gastos, especially unnecessary ones
ayoko ma-confirm na I am not living within my means. wahhhh!
LOL. Same here. But I need to discipline myself so I can plan my spending properly. At times, we need to face ourselves in the mirror.
For me, I don’t exactly do the plotting of numbers in Excel since I don’t have much expenses. It’s just that when I receive my salary, part of it goes to my savings account. And then when the money left were all consumed just before the next payday comes, then that’s the time I will examine where the bulk of the expenses went.
Hi Tyrone,
I envy you
, I got a lot of expenses, to the point that I don’t know where my money went 
. BTW, I like the template of your blog.