Tracking Your Spending, An Example
Flexo, at Consumerism Commentary, shows some of the real power of having a firm grasp of your personal financial situation. How much money do you have in the bank? How much do you owe? How are your investments looking? Are you setup for long-term success, or only short-term spending?
Every month, we see Flexo’s personal balance sheet, where he, thanks in part to his anonymity, is able to offer his readers an unbelievable amount of transparency. It’s one of the best cases of leading by example I’ve seen online.
The detail Flexo exhibits in this tracking is similar to what I do in my own life (and what I think most people should do), but I also recognize it is significantly complicated and has the potential to scare of those who might benefit from it the most. One of the primary reasons I started this blog was the recognition that people from all walks of life - high power attorneys to low-income high school students, investment bankers to school teachers - simply don’t think about their personal finances with any level of detail, much less the kind of detail encapsulated in this spreadsheet.
My advice: this is an excellent example, but it’s don’t let anything this complicated scare you. Do what works for you - keep a spreadsheet, a notebook, a napkin with crayon on it - that tracks your spending. Arming yourself with this information, no matter the source, is the most important thing you can do to set yourself on the right path.
[And remember - keep tracking your spending this week! I'm already amazed at mine so far...]
