Exposing Expenses

“Becoming wealthy is not a matter of how much you earn, who your parents are, or what you do… it is a matter of managing your money properly.” – Noel Whittaker

One thing I’ve learn since the inception of Sitting Pretty is that it has made me more aware about how I spend my money. I also have become more interested in ways to save money. In the past, I just focused on ways to make more money. The past few years, my plan has been to buy real estate that produces passive income. But financial goals should balance between generating additional income and curbing expenses (spending less).

Even though the passive income stream grows each year as I raise the rents of my income properties, the “spend less” method is probably something that I could give a little more mind share to these days. So I’ve come up with one of my New Year’s resolutions. I’m going to start keeping track of my money… every dime of it. I’ve always had a pretty good idea in my head about where it all goes but I’m sure there are small leaks in the budget that (if tracked) could be eliminated in the future.

I never liked Quicken… it always seemed tedious and although I have mentioned the tracker at MoneyPants.com, I haven’t used it personally since it requires a fee to access. But I believe in principle that keeping track of your expenses is a good idea and I would benefit from doing this exercise even if only for a few months.

I learned of a free service from an article that Sheryll Alexander wrote in the OC Metro. Well, it’s free, if you are a Wells Fargo customer. It’s called My Spending Report. “This online financial management tool gives customers a daily, consolidated overview of their spending. For example, the report can analyze spending transactions from checks, credit cards or online bill payments.”

“Most importantly, My Spending Report organizes payments by familiar categories such as gas/automotive, groceries and ATM withdrawals. The report can be saved, printed and then used to spot spending patterns within a two-month period. You get the advantages of complex personal finance software without having to enter the information yourself, saving time and money.”

Understanding your expenses is key to a well-rounded financial plan. CNN Money suggests that to build a realistic budget, start by figuring out where your money goes now.