Occasionally I might have $50 cash in my wallet and it manage to stay there for a couple of weeks.  Then before I know it, it has disappeared.  Is my money going down the drain?  It certainly feels that way!

I won’t have a clue what I spent it on.  A coffee or two, maybe milk, or giving some coins to a busker.  I really don’t know.  But what I do know is my wallet is now empty.

It isn’t just cash that seems to disappear down the drain either.  Some months I will look at the credit card statement and get a surprise about the number of small purchases.  They can really mount up during the month.  I am very aware of the larger items, like new tyres or booking the family holiday but the small things I just don’t notice.

So why does this happen?

We all lead busy lives’. There are pressures on us to be here, do this and if you have time here is another thing on the to do list.  With our money we just don’t consciously take in how much we are spending on the bits and pieces, sometimes we are just on automatic pilot. The technical term is abstraction of money.

I have a client who was stunned by how many coffees (snacks and other drinks) he was buying a day.  He remembered a couple of pit stops, maybe three.  When we looked more closely it was more like five to six snack stops depending on how many hours he was on the road.  There wasn’t any additional enjoyment from the last couple of stops, he didn’t need them or really want them.  It was just a habit he had got into of buying something after each client visit.

What brought about this revelation of the snacking habits of my client?  I hear you say.  Well, I was working with a couple who were asking me “Where’s all our money going?” They were both convinced it wasn’t them spending it.  The blame game was going on.

So we decided to find out the answer to both questions.  Where was the money going? and Who was spending it?

That started us down the path of bringing the awareness of their spending from the back of the mind to the front.  We did that by using a money diary.  Just like a food diary when you want to lose weight, only this is for your money.

At the end of the 30 days they were both horrified.  They had no idea just how much money was disappearing down the drain.  The next step was putting some structure in place to help pull things back into line, but that is another story.

If you have that sinking feeling that you just don’t know where your money is going, or there just never seems to be enough of it, I challenge you to keep a money diary for 30 days and see what habits you have that you may just not be aware of.

If you would like more help, or have any questions about how to keep a money diary, just drop us a line, we would love to hear from you.