Step Into Our Wallet

May 26, 2010 at 9:58 pm 5 comments

You may want to file this entry under cleaning out your interior closets or skeletons.   Wallets are scared spaces that house some of the most intimate pieces of our lives: money, bills, receipts, and credit cards (very charged for most folks – pun obviously intended).  Beyond aesthetics, how you feel about your wallet is probably a pretty good indication of how you feel about your financial situation.

When a good friend of ours (we’ll call her Dust-Bunny Bank Account) decided to book a trip to NYC she quickly realized she needed a way to pay for it.  Our fiercely brilliant but very broke friend (with a heart of 24 karat gold) is terrible at saving money. DBBA needed a plan. And a hustle. Quickly.   

We offered to help organize her money into a budget.  And, of course, she freaked out.  And, of course, we understood why.  Budgets are bad words. Profane almost.  There’s so much emotional charge around how we make and spend (and don’t spend) our money.   

Here we would like to provide a few simple steps that actually helped our little bunny overcome the fear and resistance of looking at her money (allowing her to make a sure fire plan to spend less of it).

1. Explore and let go of any fear, shame or judgement that you have around money.  There’s a million different ways this can achieved – journaling, meditating, yoga, drinking red wine, blabbing about it to anyone who will listen, etc … Any pop psych self help exercise will suffice.

2. Find out your monthly income and your existing debt. It’s tough, we know. But really it’s the first step to financial liberation. Set aside some time to focus solely on how much you owe.  This includes: credit cards, buy now pay later tricks, student loans, lines of credit, mortgages, phone/cable/internet bills, utilities, family members, pet debt (we know this rings true for someone). Pick up the phone to get the most up to date amount owing, as well as any applicable interests rates. Remember to breathe and not judge. This is the hardest part of making a budget.  

3. Determine and document your fixed and variable monthly expenses. Some of the variable expenses will have to be approximate for now. Things like food, entertainment, clothing and gifts are not set in stone. Do your best to estimate what you think you spend on average per month. With your list of both fixed and variable expenses, add up the figures. Does your budget balance? 

4. Review your list of expenses to determine if there are any adjustments that can be made. For example, there are many different companies that provide phone, internet and cable services. They all WANT your business. Do your research (look online for alternative offers, talk to friends, call your provider and let them know your shopping around). This is difficult. It’s time consuming, frustrating and sometimes feels like a waste of energy. Trust us when we tell you IT WORKS. If you can’t make sense of your bill, it’s your right to ask. You need to know when you’re being overcharged (and often times you are).

5. Get On Track. Yourmoney.ca provides an easy 1, 2, 3 guide on how to track daily spending.   This step is imperative to discover where your money is going (you may be surprised). We think the act of tracking your spending habits will actually deter you from shelling out more money. Who wants to admit on paper that they spent $15 a week on lavender oil (Cheryl!).

6. Take inventory of your tracking. So where is your money going?   Are there any patterns or themes to your spending? Are you surprised by what you choose to spend your money on? After tracking for one month, Dust-Bunny Bank Account discovered that she eats out more often than she previously thought. $10 here and there can really add up. This money could have easily been put aside for her NYC holiday fund. A lesson learned. It’s your turn to go back and edit your budget (step 3). How accurate were your approximations?  Do you need to make any changes?

7. Plan for your future. This doesn’t have to be scary! Dust-Bunny Bank Account is going to NYC. What are your plans? A future mortgage, RRSP’s, or a trip around the world? Following a budget provides you with the financial freedom to map out and work towards achieving your short, intermediate and long term goals. It’s also a major component of Editing Your Life.

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Entry filed under: Decluttering, Editing, Financial Organization. Tags: , , , , , , , , , .

Step Into Our Handbag Step Into Our Toolbox

5 Comments Add your own

  • 1. amanda  |  May 30, 2010 at 3:35 am

    Hey B,

    I’m love love LOVING this blog and I’m so happy for you that you’ve done it!!! You guys will be organizing closets all over Toronto before you know it. Oooh, just imagine those Yorkville closets…so much work to be done!

    Re: the previous entry, if you ever need to get rid of any of your billion purses/bags, you know I’m interested. 😉

    Can’t wait to see where this leads you! xoxoxoxo!

    Amanda

    Reply
  • 2. Andrew  |  May 30, 2010 at 4:06 pm

    I’d likely say that #6 of the above is the hardest thing to do… ladies, any tips for being able to look at a bank statement that says “withdrew $60” and be able to remember/track where that $60 went to? Like many of us (specifically guys) it’s much to easy to take out a lump sum and spend it over a bunch of crap we dont need (gum, energy drinks, snacks…). what do you think?

    Reply
    • 3. Edit My Closet  |  May 31, 2010 at 5:49 pm

      Great point Andrew! I think its difficult for most of us to remember how we spent the cash in our wallet. We have a few suggestions:
      1. Keep your receipts. As you mentioned, purchasing small items can really add up and leave you questioning where that $60 went. By keeping the receipt you have paper evidence of any purchases you made. We suggest that at the end of the day you add up you daily cash purchases and record this information.
      2. Record items at time of purchase. Many of us have cell phones that also have note taking capabitilities. This is an easy way to track your cash spending without having to keep your receipts. If you are not technically inclined a small pad of paper is a great tracking method as well. We recognize that this may feel silly at the time, but you might be amazed at how much money you spend on insignificant items.

      Hope this helps!

      Reply
  • 4. Step Into Our Office «  |  July 9, 2010 at 2:57 pm

    […] allow you to organize your budget/bill payments on your computer. Editing your office will help you edit your wallet. Also, invest in a paper shredder (it can help prevent identity theft and reduces paper clutter in […]

    Reply
  • 5. Step Into our Holistic Closet «  |  November 4, 2010 at 7:38 pm

    […] food stores and products are expensive (edit your wallet!) – leafy green vegetables, sleep, water, and exercise (go for a walk!) are inexpensive (and […]

    Reply

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