As the title says, this is a little exercise. Don’t worry, you don’t need gym equipment for this exercise and you shouldn’t even break a sweat.
This is a financial exercise to prove a point, mainly that you don’t know where a lot of your money goes.
Now for the details… If you decide to actually do this, no cheating please. You’ll only be cheating yourself
I want you to get a new pocket sized note book. In this book you are going to list every penny you spend over the next week. Every penny! List the date, time, amount and what it was spent on. The amounts should be in the right hand column and either in a different color ink or in bold or underlined so they stand out and won’t be missed.
At the end of the week, total up all the money, and then do a total of the purchases you didn’t absolutely need. Now figure that out as a percentage of the total. That last figure is the one that will raise a few eyebrows.
Now when I say “absolutely need”, I do not mean a cup of coffee because you were having a caffeine jag. I mean things you really need, either as a home expense or a business expense.
Nobody needs to post their results here. This is strictly between you and your conscience. I think the results will surprise many of you. I ran this exercise in a company head office once, for the senior members of the company, and the average amount that fell into the “miscellaneous” file was about 30%. In other words, about one third of all they spent went on things they didn’t need. Guess where the first place to look for extra money for something you want, like a new tool or some nice hardwood might be? You got it, first try! That unexplained drain on your wallet.
I know doing this is inconvenient. That’s why I use a week as the time period instead of a month which would be even better as the amounts are larger and have a bigger impact. Still, give it a try and see where you can cut out some little drains that add up over time, and redirect that money to a more constructive use.
Have a great today and a better tomorrow.
-- The nicer the nice, the higher the price!