Monday MOGO Tip: Track Every Penny for at Least a Month

$300 on meals out. $50 for your caffeine buzz. A new shirt here, the book you have to have (and then never read) there. In our super-sonic consumer culture focused on instant gratification and the future, we so easily disconnect from how much money we're spending and what we're spending it on. Does what we're buying really reflect our deepest values? Are we making choices that do the most good and least harm for ourselves, other people, other animals and the earth? We don't know, because thanks to debit cards, online shopping and cash machines, we don't have to slow down long enough to pay attention.

In the book Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence, by Joe Dominguez and Vicki Robin, one of the most powerful steps in the book is to track EVERY PENNY of your income and expenses for at least one month (preferably several) and categorize those expenses, so that you can see where your money goes and whether or not how your spending it (and how much you're spending) truly reflects your values.

My husband and I discovered YMOYL more than a decade ago. I came from a family of blithe materialism and instant gratification (whether we could afford it or not), so accumulating debt and spending what we earned was the default paradigm for me. We tracked our expenses and income -- every single penny -- for about a year and a half. We were shocked and horrified at what we discovered. Money flowed like water through our hands, trickling to this expense and that one, and we didn't even make that much money. These were the times when we were excited to have money left in the bank at the end of the month.

Once we started paying attention to the impact of our financial choices, both on our bank account and on others, we began to spend according to our values and to make purchases with deliberation and mindfulness. In a matter of months we paid off our car loan, eliminated our credit card debt, and found a simpler, saner relationship with money. (And continuing to follow a philosophy of voluntary simplicity and money mindfulness allowed us to pay off our mortgage only six years after acquiring it, and to remain debt-free thus far.)

Once you discover where your money is going, you can make conscious, informed choices about whether your purchases and how much you're spending are aligned with your values and your vision for a healthy, joyful world.

~ Marsha

Like our blog? Please share it with others, comment, and/or subscribe to our RSS feed.