ST. CROIX INSIGHTS
Tracking Your Financial Leakage
BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC
Not a day or week goes by when someone doesn’t say to me, “I wonder where all my money goes?” or “I wish the month was a week or two shorter” or “I make a lot of money and I just don’t understand how I can spend so much money.” Most of us seek to understand where we spend all our money. So what are three steps you can take to understand where your money goes and how to finally plug your financial leakage?
With the New Year upon us, it’s a great time to make technology your friend. Invest a couple hours to improve your finances on a Saturday or Sunday while watching a movie or a ballgame. For our clients, we use iAdvise (for those who are not clients but would like access as a standalone, let me know) or a free-spending tracking software is www.mint.com. January 1 is a great starting date.
Don’t worry about what happened six months ago. Start fresh. Establish where you are spending money each day, week and month. You can categorize your spending by stores, events, things and detailed categories right down to stamps. If you watch your pennies, the dollars will follow.
The second step for 2018 is to create a budget.
I know….budget….I hate budgeting……and I’m in the money businesses. But we all need to establish a baseline on where and how much we really have each month to save, spend or give away. It’s so much easier when you make technology your friend. If you get truly detailed, you can know each day, week or month where you are over or under spending. I know what you’ll discover – you actually have more money than you thought and you’ll wish you would have done this exercise years ago. You need to create a margin between your income and spending so you can achieve financial peace.
The third step for 2018 is to understand the priorities you have for your money.
This is the only way to truly master your money and direct it to where you want it to go. Priorities can range from paying off your debt, targeting to save 15% of your gross income, tithing, helping others, paying cash for the new car, etc. I do believe that the more stuff, more money, more stress.
Spending a few hours to kick off 2018 to stop your financial leakage will be empowering. Empowering you to direct where you want your money to go and aligning your actions and values together. Become the master of your money versus your money mastering you.
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Ask yourself- can my portfolio support my lifestyle in my retirement?