Soon our Canadian penny will be gone. The familiar Take a Penny, Give a Penny dish on the convenience store counter will become a thing of the past. Somehow, just knowing we can dip into it when we’re short a few cents is comforting. It’s like having a secret stash to save us from the embarrassment of running short. It’s too bad there isn’t a similar Take a Dollar, Give a Dollar dish available to us all the time.
Where does our money go? It’s easy to account for large buys, but small day-to-day purchases can easily drain us of pennies, quarters and loonies that quickly add up to double digits. Who hasn’t reached into their pocket, confident of finding a twenty dollar bill, only to feel dryer lint and some loose change. Did it fall out somewhere? You’re sure you haven’t spent it. Or did you? You have no idea, until you mentally backtrack through your day.
Becoming more aware of where our money goes is the first step to having more. If you want to have more, spend time figuring out why you have less. Here’s how to do that: keep a money journal. And before you groan, read on…
This money journal isn’t meant to point out your shortcomings. You already know you want to improve your cash situation. We’re not asking you to add up what you spend and then compare it to money coming in, so you can berate yourself about how broke you are. Nope. This journal is designed to simply raise your awareness of how money flows through your everyday life. Let’s get started.
If you don’t like recording notes on your phone, buy yourself a small notebook – the kind that easily fits into your pocket or purse, since you’ll be carrying it with you for the next week. Make two lists: Outgoing and Incoming. Date each page. Every time you spend any money, give your child ten dollars, lend a coworker lunch money, stop for a coffee, or contribute a few cents to the penny dish at the store – write it down in the Outgoing column. Start by entering the cost of your notebook. Also record any online payments, debit transactions, or automatic withdrawals, in the same column. In the other column, record all incoming money received each day. This includes your paycheque deposit, loans paid back to you, the dime you found on the ground, and any refunds. It all goes in your notebook. Don’t add up the columns or judge your spending habits, just write everything down.
At the end of the first week, review the entries. What can you learn? Maybe the record shows you’re been acting as the BFF (Bank of Family and Friends) for your kids or coworkers. If you constantly lend money to others, it may be the reason you run short, especially if it doesn’t always get paid back. Do you see a pattern of eating out or spending a few dollars on coffee every day? Without even adding up your entries, it’s plain how this habit eats away at your finances. If you paid a speeding ticket or library fine, the amounts may differ substantially, but the lesson is the same – carelessness costs money.
The purpose of this exercise is simply to develop an insight into how easily we let money go. The more we learn where it goes, and acknowledge we can change that destination, the more money we’ll have. As the month goes by and your money awareness increases, review your notebook and see if you notice a difference in spending patterns. Once we recognize our spending habits, and accept them as a choice, the easier it becomes to make different and better choices.
The notebook also shows how money comes our way, sometimes unexpectedly. Finding a quarter stuck in the grocery cart, receiving a rebate in the mail, or spying a penny on the sidewalk is a gift, and yes, one you can pay forward to someone else. Or you may want to hang on to any found pennies because one day soon, they might become valuable collector coins. Money problem solved.