Like many other families, my husband and I try to be mindful of how we spend our money, monitoring our wallets for the financial futures of ourselves and our two children. But also like many families, life often gets in the way, and before you know it, we’re asking ourselves, where did all the dollars go?
Post-holidays, we were feeling a bit of financial stress, with lots of questions and unknowns as we tried to map out the year ahead of us and beyond. We had trips we wanted to plan, purchases we wanted to make, and investments to contribute to for the future of our family.
But as much as we would like to do every single one of our wishes, life with two littles isn’t exactly easy on the wallet. Preschool costs, nonstop diapers and new sneakers, and those ever-increasing grocery bills have made it clear that we needed to put a bit more thought behind our credit card swipes, both big and little. While we were in no major financial danger, we wanted to take some smart steps to prevent any future slip-ups and help to put us on steady financial footing.
Preschool costs, nonstop diapers and new sneakers, and those ever-increasing grocery bills have made it clear that we needed to put a bit more thought behind our credit card swipes, both big and little.
So, we opened up all our accounts and took a good look, from our checking and savings to investment accounts, credit cards, and more. We signed up with Mint to help us track our spending, and we decided to dive in, making note of everything we purchased in the next month. It was interesting, eye-opening, and we stand here today, a few weeks later, feeling wiser and more confident about our financial future. With life seeming more than a little unpredictable and unstable at the moment, feeling as secure as we can with where we stand financially has proven to be one of the biggest sources of comfort and reassurance.
When we started out on our journey of “counting pennies,” we couldn’t have guessed that we’d be sitting in the middle of a worldwide crisis only a short time later, but the timing forced us to learn these lessons all the more clearly.
It takes effort to even begin
You think it’ll be easy; just write down everything you buy, how complicated could it be? Or even easier, let an app do the dirty work for you. But there was more involved in getting us all set up than just that. If you go the old school way and write down every little penny spent, you must be 100 percent consistent—a few forgotten purchases and it’ll be difficult to get an honest analysis of your spending.
If you use an app, there is some set-up work that needs to be completed to ensure all of your accounts are reporting correctly and currently. It took a little bit of time but it was worth it. We had a positive experience with Mint and loved that we could see a clear picture of where our dollars were going with their detailed breakdowns within each spending category.
Take stock of all automatic payments
Similarly to when you organize your closet, you start by taking every item out and seeing what you have to work with. As we laid out every penny we had in our hands, we realized we had more automatic payments than we were really aware of. From iCloud storage plans to Netflix and Hulu, we had set these payments up … and then forgotten about them.
It was the perfect opportunity for us to really take stock of what we were using (iCloud and Disney+) and what we’ve been shelling some money out for each month but not really taking advantage of (Dropbox). We were able to cut some costs right from the start. Automatic win.
Embrace your “don’ts” from the start
To further kickstart us towards success, we reviewed areas of spending we knew we valued. And then, we looked at areas we knew were ones that we didn’t currently spend much on, and we’d now be willing to consider an even more strict spending plan for.
We knew our grocery bills were higher than they could be, we were aware that we could trim them if we tried. But good food is a priority to us, from the quality to the variety. So we didn’t want to stress over our grocery bills too much; this was an area that was important. Even when we began to be more conscientious of our grocery trips as the country embraced social distancing more and more, we still didn’t fret too much about our grocery bills; this food was essentials and we didn’t want to over-analyze any of these purchases.
However, when we say “good food” is a priority, I mean good homemade food; we rarely order takeout, and as we began to track our finances, we realized we were OK with giving up takeout completely. By making that executive decision from the start, we don’t waver anymore on Friday nights.
Stop and think before you Starbucks
Before we even began tracking our spending, we tried to not indulge in too many little “treats,” as we were aware that little treats add up quickly. But by tracking every penny, I had to face the truth that I was quite good at making excuses for these little treats much more easily than I had realized, much more frequently than I would have cared to admit.
Working on a tough article? I deserve to hit up the chic coffee shop and buy one of their fancy lattes. My toddler is being an extra good kiddo and helped Mama out all morning? He deserves a cake pop from Starbucks … and if I’m going to be stopping at Starbucks, I might as well pick up something little for myself too.
Slip-ups like these happen, no matter how sincere and serious your intentions may be. But by being held accountable by tracking our spending, I was forced to do a double-take before pulling out my credit card and by stopping to think twice, more often than not, I put the card away and kept going.
When these treats quickly became a thing of the past as we hunkered down at home, I found some release in online shopping, once again giving myself “permission” considering the high-stress vibe of the world at the moment. But a little reality check (no need to spend any more money than I normally would with new clothes, no one will be seeing them anytime soon) put me in my place.
From appliances to viruses: be prepared
Little unexpected treats may happen here and there, but a $5 latte isn’t going to totally derail your wallet (20 $5 lattes is a different story). But bigger unexpected purchases also happen, and during the month we tracked our spending, we were served a dose of reality on more than one occasion. Our dryer kicked the curb and as any mom will tell you, you need a working washer and dryer stat when you have two messy toddlers. We weren’t planning on making a $600 appliance purchase that random Wednesday evening, but we had to. A perfect reminder that these sorts of things happen—such is life.
But we also believe—and were reminded—that it’s important to be prepared for even bigger surprise circumstances as well. During our time tracking our finances, coronavirus began its journey across the country and living in California, we experienced its effects early on. As we prepared for the coming weeks and months, we stocked up on necessities so we’d feel better no matter what’s on the horizon.
Emergencies can come in all shapes and sizes and having solid savings proved to be essential.
Money can bring happiness
Just hear me out here: I know this goes against everything we’re taught and believe, but tracking our finances made it clear to us that money actually can bring happiness. Not the ultimate soul searching type of happiness in life, but a ton of joy day in and day out? Oh yes, money helps to make that quite possible.
I’m not embarrassed to admit that money is behind a lot of joy in our lives, even if we find that joy in activities, not physical items. We love going to the science museum as a family and exploring the animal and aquarium exhibits, but we pay for a membership in order to access these exhibits. It’s not free.
But I came to also feel confident in stating that it’s OK if items bring happiness too. I value taking care of my skin and love trying out new serums and creams; those cost money. But I consider that money well spent if it makes my evening routine one I enjoy and helps to give me confidence with the skin I’m in. No one may see those chic new sneakers I’m tempted to purchase, but I refuse to let my skin go to shambles, homebound or not.
Education equals confidence, and confidence equals freedom
Tracking your money, penny to penny, for an extended period of time is interesting. It’s, without a doubt, the best way to get a good idea of where you could be smarter with your spending. But when you work on managing your money, it often comes with a sense of shame, with the impression that you made mistakes, that you’re struggling.
But going through the experience—and continuing to monitor to this day on a slightly less intense scale but perhaps with even greater importance and need—has actually given us more confidence. Confidence in how we manage our money, and thus, how we live our lives. It’s given our family confidence in the future, in what we need and what we hope for. And if that means continuing to track our dollars so we can maintain that feeling? Well then, I’m all in.