Here at Aptus Financial, we believe that financial planning should be transparent. You should have a clear understanding of your finances and what your financial planner does for you. That’s why we’ve decided to draw back the curtain and give you insight into what we discuss as planners.
Expenses Tracking
This week, the topic that came up several times was expenses tracking, particularly WHY we track our expenses.
Here at Aptus, we believe that tracking your spending and expenses is a great way to get a full picture of your monthly spending so that you can make conscious decisions about where your money goes. There is a mindfulness at play here – controlling money chaos often means bringing awareness to the parts of your budget and financial plan that you might have otherwise overlooked.
But there are times when tracking expenses just becomes another routine task – there isn’t any motivation behind it. And that is the place where action takes a backseat, and your plan might become stagnant.
Before we even change anything, we usually take a step back and ask a simple question: Do you actually know where your money is going right now?
Not in a judgmental way, just in a “let’s get clear” way. Because once you can see it, you can start to decide what stays and what doesn’t.
Why do we feel less motivation?
The number 1 reason – our brain. It’s hard for our brains to conceptualize money as tangible or concrete when it comes to spending because it is an “invisible” thing. We may not notice when our spending begins to encroach on our ability to retire because it does not have short-term impacts on our lives.
More often than not, our brain is like Lucille from Arrested Development, with no context of how much something actually costs in comparison to the greater picture.
To our brain, without an understanding of what tracking expenses means to the things we care about, it’s just another number to be ignored.
Tracking expenses is also often reactive. You’re telling yourself that you’ll try better next time when seeing the picture, but you’re not necessarily making the necessary changes when it comes down to it.
One thing we remind clients of often is that this isn’t about spending less. Most people aren’t “bad” with money; they’re just spending on autopilot. The goal is to make sure your money is going toward the things you actually care about to make your spending more intentional.
So, how can we change our mindset?
Jill Raderstorf says that her clients' “aha” moments usually come when she shows them how much money they need to have for their nest egg. “Suddenly, there’s a future goal, a concrete number. Now, they want to know how they can get there and whether they can get there faster. That’s when tracking expenses to start saving becomes productive.”
Erika Agard reflects that tracking expenses often has an emotional side to it. “We don’t always want to reflect on the financial choices we’ve made because we might feel shame around it. But, ultimately, expenses tracking is just another tool to get you to where YOU want to be. I recently had a client call where we discussed tracking expenses, and just by walking my clients through what their choices now could cost them in the future, we completely shifted their mindset on their expenses tracking. Now, we feel confident that we can move forward with intention.”
Another thing to remember is that tracking expenses doesn’t just help with your long-term goals, but your near-term ones as well. Knowing how much you’re spending on your travel fund when you want to buy another home goes a long way to making sure that you are living the life you want for the future AND the now. Good news? You get to have both when you have a plan.
Bringing it all together
The goal here isn’t perfection. It’s awareness.
When you understand where your money is going, you give yourself the ability to adjust—whether that means saving more, spending differently, or simply feeling more confident in the choices you’re already making.
You don’t have to get everything right. You just have to start paying attention.
If you’re not sure where to start, here are a few questions to think about:
- What am I spending money on that actually feels worth it?
- What am I spending on that I wouldn’t really miss?
- Do I feel like I’m choosing where my money goes, or just reacting to it?