Classic Personal Finance Mistakes: Part 3
The third major personal finance mistake I made is one that is a lifetime struggle for most of us. It was simply not knowing where my money was going. Every finanical magazine/guru will tell you this is the first place to start when turning your finances around.
The cure always sounds a lot easier than it actually is. I find that tracking my expenses is like trying to patch a sieve; mostly because of the increased access to our money, as well as all the different ways we spend it. We all know what we have to do but it is the actual process of doing it that is the problem.
I used a combination of techniqes that people recommend to finally gain some control over my expenses:
- I spent the money and committed to Quicken to categorize my expenses
- I put every expense I could on my credit or debit cards so that they could easily be downloaded into the program.
- the majority of my cash purchases were used for food so I just classified each ATM withdrawal as part of my grocery/food expenses.
It sounds so simple yet it is soooo hard to consisently follow. Even with this plan it took me a good 2 months to really commit to the program. Setting up a good starting point and linking my accounts was something I could only do in small doses. With much persistence I was able to clear up about $200 a month in waste expenditures(bank fees, interest expenses)
Currently I use Quicken to track my expenses only and I follow my daily/monthly balances on each individual site. I have considered switching to Yodlee but I have not made the jump just yet as people have had mixed reviews about the site. What has worked/not worked for you?
