Is your money going down the drain?
I won’t have a clue what I spent it on. A coffee or two, maybe milk, or giving some coins to a busker. I really don’t know. But what I do know is my wallet is now empty.
It isn’t just cash that seems to disappear down the drain either. Some months I will look at the credit card statement and get a surprise about the number of small purchases. They can mount up pretty quickly during the month. I am very aware of the larger items, like new tyres or booking the family holiday. But when it comes to the small things, I just don’t notice.
So why does this happen?
We all lead busy lives. There are pressures on us to be everywhere and to keep chipping away at our endless to-do lists. When it comes to our money, it's difficult for us to consciously take in how much we are spending on all the bits and pieces that we do. It's as if we are just on auto-pilot, going through the motions. The technical term for this is called abstraction of money.
I have a client who was stunned by how many coffees (snacks and other drinks) he was buying a day. He remembered a couple of pit stops, maybe three. When we looked more closely, it was more like five to six snack stops depending on how many hours he was on the road. There wasn’t any additional enjoyment from the last couple of stops. He didn’t need them or really want them. He had just made a habit of buying something after each client visit.
What brought about this revelation of the snacking habits of my client? Well, I was working with a couple who were asking me “Where’s all our money going?” They were both convinced it wasn’t them spending it. This is usually when the blame game happens.
So we decided to find out the answer to both questions: where was the money going and who was spending it?
That started us down the path of bringing the awareness of their spending from the back of the mind to the front. We did that by using a money diary. Think of it as food diary that you use when you want to lose weight. Only, this is for your money.
At the end of the 30 days, they were both horrified. They had no idea just how much money was disappearing down the drain. So came the next step, which was putting some structure in place to help pull things back into line. But, that is another story.
If you have that sinking feeling about your not knowing where your money is going, I challenge you to keep a money diary for 30 days. This will help you see what habits you have that you may just not be aware of.
If you would like more help or have any questions about how to keep a money diary, click the button below to get information about our coaching and mentoring programmes.
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