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[Activity] Analyse your life's costs
Lately, we’ve been talking about prices going up and most people are probably just skimming past it thinking it doesn’t apply too much to them.
I’ve put together a practical exercise you can do over the weekend.
If you are brave enough, you need to look at EVERY cost in your life. This isn’t fun, but neither is not sleeping or worrying about money, so get this done.
EXERCISE
Go to internet banking and run an export of 2 months of bank transactions, including your credit card + any accounts where you spend money.
In these exports, you’ll find negotiable costs and non-negotiable costs - go through and work out whether that cost can be binned or has to stay.
This is an exercise to get you thinking, not thinking about how boring life is if you are not spending any money at all. If you have to have Gucci shoes for Instagram, it is what it is, go you.
Here are some thoughts:
- Wow that’s a lot of money spent on food. Could we be smarter about that?
- Hmm, do we need to review our savings plan temporarily?
- Power, internet, phone - are these still the right plans for us?
- Am I actually using my gym membership (hint if you aren’t, then you should be - I’m huge on wellness spending, so biased here),
- What even is that insurance? Insurance is used to de-risk potential outcomes in your life. Re-read that 3 times,
- Do you know how consumer finance works because you can use it to your advantage too (Q Cards, GEM Visas etc),
- How many have now, pay next week services do you have? Get them under control,
- The hidden habit. What’s my ‘boredom vice’ - we can often fill boredom by spending money, it’ll show up in your transactions. What is yours?
Think about if you literally had NO INCOME, what changes would you make to each of those expenses you are currently paying?
Look at it this way - every expense you pay is solving a problem. Rent=somewhere to live. Netflix=entertainment. How would you solve these same problems with less or no money?
These are really worthwhile exercises to do to wake yourself up to your spending habits.
TIP: Set financial spending habits that are actually sustainable and that you can commit to. Think long game AND short game. I.e. if you say you won’t spend a dollar for the next month, is that really sustainable and something you can implement to help you in the long term?
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EXTRA - Capping the frequency of transactions
Similar to running an export of your banking transactions, some of us still like to print things and get the highlighter out.
Whichever you choose, you will want to run your eye over the statements and see how frequently you are transacting at certain stores/businesses/cafes etc.
As an example, you will note purchase one from Monday at ‘Cafe x’ as 1, then purchase two on Wednesday as 2. Go through and see, in numbers, how many times you are going to the same places.
Then it is up to you to have a discussion with yourself to decide whether those purchases need limits.
What this exercise does is that it helps you understand, in numbers, how many times you actually go somewhere. The ‘I went to ‘Cafe x’ 22 times in April might give you the wake up call that you never intended to go there that many times.
You may then choose to put limits in place for places you frequent. Only 2 lots of McDonalds per month etc.
Set your bare minimums and then try to stick to those.
Sometimes less is more!
Enjoy your weekend.
Luke
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Did you know:?Spending on NY's eve in 2021 through the core retail merchant group (excluding hospitality) was $140m nationally, up 9% on NY's eve in 2020 -?Herald
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2 年Luke a very good process to go thru it really opens up your eyes. I used to keep an excel spreadsheet detailing all expenses - food was a huge expense for us