Do You Have a Spending Addiction?
One of he first things to do when beginning the process of getting our money right is to do an assessment. There are psychological things to look at, like why we spend, what our triggers are, whether there is a conscious awareness of what’s happening when we’re spending, etc.
But there are also concrete things to assess as well. One of the main things that Dr. Lynn Richardson (Celebrity Financial Expert, featured above) tells people to do, is to look at our spending patterns. Specially, she tells us to do a thirty-day tracking (of either the last thirty days or the next thirty days.)
Writing down all our debt will give us a snapshot of where we are financially. This can be enlightening and a great motivator for change. It isn’t the same as tracking though, and not nearly as powerful.
Tracking the last thirty days requires going back to look at all bank statements and credit card statements; and identifying what each dollar was spent on for that thirty-day period. Card purchases will be easier to track; cash withdrawals may take time to figure out, but the process of trying to figure them out is important. Some banks allow us to download the data into a spreadsheet. Then, it’s just a matter of plugging in what that specific purchase was for or what category it falls into. This can be done in as little as a couple of days.
Tracking the next thirty days requires logging in a small notebook, an Excel spreadsheet, or a tracking app; every dollar we spend. Log the date, the amount spent, where the money was spent and for what. It will take discipline to follow through the full thirty days, but the process can be quite beneficial.
Tracking the last thirty days is immensely powerful in terms of showing us what we have been doing: showing us money we have already spent on bills, incidentals, and frivolous things. We may find hundreds of dollars of cash withdrawals that we can’t account for. We many find 40 or 50 transactions (or more)- in just thirty days; sometimes 5 or 6 purchases with the same merchant; confirming our suspicion that we do have a spending addiction.
Tracking the next thirty days is powerful in terms of showing us real time what we are doing, while giving us the benefit of taking corrective action based on our new awareness and knowledge. Naturally, we’ll start to question the purchase we are recording and that will inform our thinking the next time that same kind of action takes place. This internal dialogue causes us to confront our behaviors, emotions, and spending addiction real time. There’s a good chance, spending levels will be down in comparison to previous months.
It’s an approach worth trying if nothing else has worked in the past. To support our commitment to do better, we will require a shift in how we think about money. I HIGHLY recommend Dr. Lynn’s online course, 21-days to Financial Freedom. It’s 21 days of bite-size thoughts and assignments to transform the way we think about money. We can break the our spending addiction.
