I wanted to share with you today an observation that I had recently. Amber and I have been reading many of the same books about how to become financially independent. I can highly recommend the Rich Dad, Poor Dad series, The Richest Man in Babylon and The Millionaire Next Door. They all have different insights and approaches to watching your financial p’s and q’s.
This has lead us to set a budget for each month and audit ourselves at the end of each month to see how we are doing within our set budget. All of the above mentioned books talk about doing this as a way to grade your financial life and see what you need to work on.
Before we started doing this I never knew how much money I was spending each month or where all of the money was going. I must admit that before we were auditing ourselves I was concerned with what the audit/budget was going to show and that we didn’t have enough money to do all of the things we wanted to do.
The realization: watching exactly how much money we are spending and saving has made me feel much safer than I did before of our financial foothold. I am amazed at how we budget and are easily able to stay under our budget once we know what we need each dollar for. Our spending account is building a nice cushion for emergencies because we have consistently been able to come in under budget in a lot of areas.
Above and beyond that we are saving more than I thought we would be able to for our future and for fun. We actually had enough money each month, once we looked at our budget, to make a savings account for investing plus a savings account for fun.
It seems like an incredibly boring thing to work out how much you are going to spend on groceries, gas, credit cards and insurance. But once I saw that we were getting out of debt and building our savings all at the same time (and much faster than expected), I am giddy to do it each month.
I would highly recommend it to anyone who is looking to get better financial control of their life.
Are any of you doing this? Does anyone else have a great tip you would like to share? Let me know in the comments below!