Why So Many People Avoid Expense Tracking (And What They Should Do About It)
Does the word “budgeting” make you cringe? This blog post might be for you.
A recent survey showed that more than 8 and 10 Americans track their monthly expenses. What’s more, the majority said doing so helped them get out – and stay out- of debt.1
The same survey gave the showed that most people don’t budget because they don’t have enough income, have never been successful with it, or find it too time-consuming.
Debt.com, accessed June 2023.
If you don’t track your expenses, and one of the above sounds like you, read on – there’s hope and reason to track your expenses.
The most meaningful way to get somewhere you are not to get a solid grasp on where you are now. Think of it like planning a road trip. To make it to your destination, you have an idea of route options. This wouldn’t be possible if you didn’t know where your trip would start.
Budgeting and expense tracking are no different: they will give you an honest look at where you are today so that you can get to where you want to be: financially independent.
Let’s address the reasons in the above graphic one by one.
It’s too time-consuming.
Getting started with budgeting has never been quicker or easier. There are numerous online budgeting tools that can help you keep track of your spending. It’ll take little more work to get started, but these tools are smart enough to learn your spending patterns, making categorizing and keeping track easier as time goes on. Invest the time and mental energy up front in taking control of your finances, and you’ll be rewarded.
It makes me feel anxious/bad.
As much as 50% of buyers feel some amount of guilt for making a purchase at some point, according to an online survey.2 Buyers remorse occurs when our actions feel misaligned with other priorities or feelings about our financial situation.
My advice: be kind to yourself, but be honest. Don’t get hung up on past spending (even that spending happened last week.) It’s done, and can’t be changed. Focus on what you can control moving forward. Is there a monthly expense you can cut that you just don’t need? If it’s something that brings you joy and you don’t want to cancel it, is there a way you can do it in a less expensive way?
The possibilities are near endless if you put your mind to it. Remember – it’s your money – no one else’s. You get to decide what happens to it, and you don’t owe anyone an explanation or justification. You are your money’s biggest advocate.
I don’t have much income.
News flash: budgeting is about controlling what goes out, regardless of how much you earn. This may bring little peace of mind if you are in a position in which you’re doing a weekly balancing act of shuffling money around in short order to make ends meet. Your income might be less than your expenses, but it doesn’t mean you shouldn’t try to keep track.
Ask yourself if there is anything you can do – even temporarily – to get ahead of your current situation. This may mean a part-time job, a gig such as DoorDash, Lyft, or even online surveys. If you think you don’t have time to take on a side-hustle, just imagine how much less stress you’ll be in once you get ahead in 3-6 months. Remember that it’s temporary – and don’t let any preconceived notions about working a job that’s “beneath you” (within reason) stop you from doing what you have to do to get ahead.
It causes disagreements with my spouse/significant other.
Money is often a major source of friction in relationships. If this is the case, it may be wise to seek out a money coach who can help counsel the two of you to reduce friction. Check out our post on having better money conversations with your significant other.
I have budgeted, but it’s never helped.
Ask yourself why you think this is, and then ask yourself whether you were truly budgeting, or forecasting. What’s the difference? Budgeting is allocating money you already have for your needs and wants. Forecasting is allocating future income (that you don’t have, and might not get!)
You might also wonder what the point to budgeting is if the amount you allocate towards groceries, gas or utilities is routinely off and you overspend. You’ll find that overtime, your expense tracking will start to tell a story, empowering you with knowledge about where you can cut back so that you can use your hard-earned dollars for things you really want.
For example, if you’re routinely overspending on groceries, but you find yourself throwing away food every week, it’s time to stop and ask yourself whether you’re routinely throwing away money due to poor planning. Knowing that this has been an ongoing issue, you can start meal-planning. You might also look at your dining out category and notice some overspending. With meal-planning, you’ve now found two categories to potentially cut expenses.
Remember that unexpected things will happen. It doesn’t mean stop because you got an unexpected bill. You will get through this, it’s only temporary, and happens to everyone – even the wealthiest. Expense tracking is about building a healthy habit for life, regardless of circumstances outside your control.
Budgeting, like life, is a lot of trial and error. That’s okay. Be patient and be kind to yourself, and you can take control like never before.
https://www.debt.com/research/best-way-to-budget/
2. https://www.creditdonkey.com/buyers-remorse.html
