Where did all my/our Money go?!?
Many people at the beginning of the year start receiving tax statements showing how much they earned in the previous tax year. It is at this point those same people may start to ask themselves, WHERE DID ALL THE MONEY GO?
I do need to break for a moment and mention personal philosophies that I carry. I believe married couples share finances and are responsible to each other for the financial well-being of the marriage. There might be several legal and religious viewpoints that may be similar or completely opposite, but from my viewpoint and experience, married couples that share financial responsibility also share the benefits of Financial Peace & Purpose! For those of you that are single or engaged, you owe a personal responsibility to yourself (and any dependants) until you are married. Engaged couples that readily discuss their financial obligations/health have significantly better odds of staying happily married than those who remain financially silent with their partners.
For most Americans, tax time is an unfortunate event that reminds us of all the money we made throughout the year, but we have no idea where it all went. We can hopefully remember any vacations taken, cars purchased, and bigger life moments but did you really spend ALL the money you made? When looking at W-2, 1099, etc., tax forms that show annual earned incomes it can be depressing to see the large sum and not be able to account for where it all went. At Blue Collar Budgets, we want to change that!
By getting in the habit of writing each and every expense throughout the month down in a notebook, you will easily be able to see where your money is going! Although housing, food, transportation, and utilities are expenses few, if any of us, can do without, having a written monthly budget allows you (and your partner) to hold yourselves accountable. It may seem like a tedious task and there is much hesitation to write down expenses as they occur. Writing down each expense forces an imprint as you acknowledge the fact that you are physically and emotionally spending money.
Swiping debit or credit cards is the best/worst thing to ever happen in the world of personal finance. It allows virtually everyone the ability to quickly and easily spend money (or the credit card company’s money, which is worse!). Most tech and financial companies currently do everything feasible (“fees”-ible) to make spending money as quick and effortless as possible. The brain sees this action as a positive reinforcement and releases dopamine as a reward. In the long run, this behavior results in increased desire for instant gratification through the Buy-it-Now and Add-to-Cart culture we live in currently. This is extremely dangerous behavior for personal finance but extremely profitable for big business.
The single easiest and best option to reduce or eliminate impulse purchases, is to hold yourself (and partner if applicable) to a higher level of Financial Fitness by writing each and every expense down. This simple and quick task allows you to reconnect the emotional feeling we used to have with cash, but have since lost due to increasingly digital purchases and easy payment methods. Remember waiting in checkout lines in the 80s and 90s (before debit cards and most did not have credit cards either) and each person either paid in cash and you had to fill out a check? The checkout process was much slower, but now almost anyone can pay in just a few seconds and leave with their goods! This savings of a few seconds in time can result in a loss of connection to your hard earned income.
By taking a step back and realizing at tax time you have little to no idea where your income went this year, it is the perfect time to get some Financial Coaching with Blue Collar Budgets. There are so many distractions in life that keep you focused elsewhere; wouldn’t it be nice to have someone on YOUR team? Committing to growth through Financial Coaching sessions allows you (and your partner) time each week, month, or quarter to meet with a specialist who’s only goal is to systematically help you achieve your level of Financial Fitness.
