The Financial Gym is a national, personal financial services company with a fitness-inspired approach. Certified Financial Trainers™ work with clients one-on-one virtually and in physical locations across the country on a regular basis to teach them financial literacy, how to be accountable for their money, and how to make smarter, more strategic decisions about their finances.
Tracking your weekly spending is an essential part of sticking with any financial plan! Just like diet and exercise, there are a million different ways to go about tracking your spending. With each method, you will see great success stories and great failures. There is no right or wrong way to track your spending, but you do the work to experiment and find the right system that works and is sustainable for you.
3 Common Barriers to Spend Tracking:
Lack of Clarity: It’s difficult to understand how to control your spending when you don’t have a clear idea of what money is available to be spent and what has already been accounted for in fixed expenses. Instead of doing the mental math, it’s easy to just resort to using a credit card to avoid overdrafting and “dealing with it later”.
Making Trade-Offs: Perhaps you don’t want to track your spending because if you knew you were going to go over budget, you wouldn’t want to actually stop and consider another option? If your weekly spending goal is $200, on Friday, you realize you only have $5 left to spend before your week starts over, would you actually cancel your dinner plans or forego buying something?
Time: With so many things demanding your attention, it can be difficult to make time to track spending and relive your past spending, especially if you don’t feel confident about your performance.
7 Trainer Recommended Methods:
No Budget, Budget: Set your automatic savings transfers each month or pay period, then spend whatever’s leftover. This method is best for people who don’t like the minutiae of tracking every expense but want to make sure they’re achieving their savings goals and not letting too much cash sit in their checking account. If you can maintain your automatic transfers and not overdraft your checking account or carry credit card balances, then congratulations, we don’t have to micromanage your expenses!
Two Checking Accounts: Designate your current checking account for your fixed expenses and bills and open a second one just for spending. Each week, set an automatic transfer for your weekly spending number from your fixed checking account to your variable checking account and only use that debit card for spending.
User-friendly Mobile Banking: If you’re willing to switch all of your banking to a new bank whose app has advanced budget tracking features, then you should consider opening an account with Simple. Simple has all the features already built-in to their online banking interface to follow your plan to a tee. They have a high yield savings account for your emergency fund, smaller savings goal features, and most importantly, they show your “Safe to Spend” number and hide the other money that is already accounted for.
Variable Spending Credit Card: For those who are more advanced and have a proven track record for paying off credit card balances every month, you can dedicate one credit card to track all of your variable expenses. Similar to the 2 checking account system, except instead of a second checking account/debit card, use a credit card. To maximize rewards, you can choose a flat rate travel rewards card or a cashback card that gives bonuses on popular variable spending categories like groceries and gas.
Hand Tracking: For tactile learners, sometimes handwriting every variable expense is the best way to track your spending in real-time. You can do this by tracking it in a journal or envelope.
App Tracking: At the Financial Gym, we are aggressively low tech because we don’t think the best personal finance app has been invented yet. All of them have their downsides and most of all, they all require too much of your time to categorize minutiae that doesn’t translate into a change in behavior. That said, there is 1 app that we have come to like and it’s Daily Budget. This app has the capability to track your entire budget, but for simplicity-sake, we recommend only using it for your variable expenses. You do this by setting your Monthly Income as your weekly spend number X 4. It calculates a daily number you can spend and it deducts as you enter expenses in. If you have money leftover that day, it carries over to the next. If you overspent that day, it deducts from the next day to make up for it.
Cash Detox (aka All Cash Diet): Going on a cash diet, even temporarily, is a really great way to reorient your spending and physically see how money leaves your wallet.
If you are interested in speaking to a member of our team, schedule a free 20 minute consultation to get started. We will ask you a few basic questions to get to know you more, walk you through our financial training program steps, and of course answer any questions you may have.