Cash Flow - Know your Spending

Updated: Aug 5, 2020

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One of the most important things I figured out, was cash flow. Always know where your money is going, and what you are spending it on. So how did I do this, well I tracked it, by the day, week, month, and even to the year, right down to the penny, all done through a spreadsheet that I created. I have used this same spreadsheet over and over throughout the years, and I tracked every penny I spent, and I mean every single penny over a given period of time, What I did was enter every purchase, and bill payment. If money came out of my pocket, or bank account. I entered it into the spreadsheet. Looking at the spreadsheet, I could then figure out exactly where the money is going and where I could reduce my cash outlay, especially on things I call luxury spending or nonessential spending. When you start to realize or notice the yearly cost of certain things and then compare it too how long and hard you have to work in order to have made these purchases, it opens your eyes ie if you buy just 1 coffee per day at a cost of $2.25/coffee, that will equal to $821.25 per year, now if you look at it as how many weeks pay this is, or how many hours you have to work in order to make this money, just to buy a coffee per day, is it worth it, then I asked myself what else could I have done with this money, makes you go HMMMM. Now if you enter in stuff like restaurants say an average of twice a week at $40 per visit, comes to $4160 per year or buying lunch at work say 3 times a week at an average cost of $8/ meal is $1248/ year or even a case of water per week at $5/case is $260/year. The biggest thing I found was I had the thought process of oh, it’s only $5, $10 or $20, no big deal. Then I realized at how big of a deal it actually was. What I noticed was several things when I started looking at the spreadsheet, I noticed that on some services, I was paying twice for as in data on my cell phone, and internet at the house. I removed the data from my cell phone (I had wifi at the house, and most places offered free wifi) $55 per month (Confession, data was put back onto the cell 2 weeks later, but at a reduced limit). I was paying for cable tv, but 95% of the time, I watched internet TV. So, I canceled the cable TV service $145 per month, I had a landline at the house but only used the cell phone. Canceled the landline $50 per month, . I loved my beer so I bought a 24 every week $ 200 per month, went down to a 12 pack. I liked to rent a couple of movies for the weekend $15 per week (Why I did this, I don’t know, as I had internet TV and it was all free). I cut back from buying 3 coffees a day to 1 every couple of days… I could go on and on… But I was able to reduce the cash outlay by almost $20,000 per year by just making slight changes. That’s all it was, slight changes, I never really noticed much of a difference other than I was drinking less beer and coffee.

People wonder why they never have any money available, Not knowing where, or what you are spending your money on is the reason. When you add up just what I listed above in relation to the work lunches, coffee and restaurants, well that is almost $6500/year or $500/month or $125/week. Get my point. Now if you literally track every penny you spend, over a period of time, you will get an accurate picture of where your money is being spent. Once you have this picture of your cash flow, you can then take this information and figure out where you would like to reduce spending, I said reduce spending, not eliminate, as what would life be without some sort of indulgences. Imagine what you could then do with your freed up money, maybe create a savings plan, save for a vacation, put a down payment on a house, buy a nicer vehicle, treat the family to a special event or just establish financial breathing room and not live pay to pay…It’s a great feeling when you can pay cash for something and it will open up options to where you can start living life, living free

Financial Freedom is Available to those who Learn About It, and Work For It

Shane Lifeman

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Financial Freedom is Available to those who Learn About It, and Work For It

Shane Lifeman

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