It looks like a few more people are joining us at Fiscally Chic. So a big welcome to my new readers! We’re in the middle of my “Makeunder My Finances” series. This week is Step 2. If you missed Step 1 (Create a Vision) you can find it here. And of course I have to give props to the mastermind behind these steps: Jess of Makeunder My Life. Here are her classic makeunder steps. On with the show!
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Step 2: Exfoliate Stuff
According to Jess, “this is the step where you dump the stuff that isn’t needed for the life you want to live. Just like our skin, there is a lot of dead ‘skin cells’ in our homes that are clouding the healthiest, best life we want to live. And by sloughing off that unnecessary layer of crap, we emerge brighter and more purposeful.” Guess what? There might be some dead skin cells lurking around your budget as well. But first, you need to take a look in the mirror see what and where they are.
This makeunder step may be the most daunting since it involves accumulating the information that makes up your past and current financial situation. Through the magic of the Internet and computer software, it doesn’t have to be that difficult. I use mint.com to compile all of our financial data. It’s a fantastic free (and secure!) site that offers personal finance and budget software, online money management, and budget planning. Mint brings all your financial accounts together online so you can see the big picture in a single click. We have our checking and savings accounts, credit cards, and 401(k) and investment accounts all feeding into our Mint account.
So what do you do with all of that information? Mint categorizes your transactions (with some of your assistance) so you can see how much you’re spending on rent, food, entertainment, shopping, etc. It also monitors income, loans, and investment transactions. It was pretty eye-opening even that first month of using Mint. I had no idea how much I was spending on lunches or coffee during the work week. (John is really good about bringing his lunch to work) I thought that the couple dollars here and there wouldn’t make a difference until I saw the grand total at the end of the month. $130 even though we bought lunch food at the grocery store? Yikes! On the flip side, we didn’t spend much money shopping.
One of the other benefits of Mint is that it sends me alerts when I go over budget. They also email me weekly updates. It’s like my personal accountability partner. Speaking of accountability, share your goals with a significant other or trusted friend. You will be more likely to succeed when someone is cheering you on and helping you over hurdles.