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I went to the bank a couple days ago to finish the paperwork for my first job. I was pretty excited that I would be making my own money.

When I went to the teller to get some information on my savings account, she mentioned that my checking account was over drafted. I just shrugged and was told her I knew. I wasn’t sure what she meant…did she mean I didn’t have any money left? Because I knew that. I spent all my allowance from the month before on various things I couldn’t remember and probably didn’t need. When I got home, I had a letter from the bank telling me that my checking account was over drafted and they were going to close the account if I didn’t at least pay the fee within a week. I was shocked, what did they mean overdraft? I thought with debit cards once you ran out of money that was that. I didn’t know there was even such a thing as a negative balance! It was completely overwhelming. Kindly, my mom went to the bank to deposit my next month’s allowance to keep the account from closing.

This led me to another realization. There are two basic steps to managing your money: budgeting and secondly, keeping track of your expenses. I had the first part down. My budget was beautiful, and in my eyes, pretty realistic, but the keeping track of my expenses? Not so beautiful.

When we sat down and went over my statements for the past couple of months, it was obvious where things had gone wrong, and they had gone wrong often. I had recently signed up for online banking, which is a magical thing, and had been relying on my phone app to let me know how much money I had. Unfortunately, the pesky thing about cards and online purchases is, it doesn’t always register the balance right away until the order is processed. Or if you give someone a check, that doesn’t mean they go running to the bank that second to cash it. In fact, a lot of people like to sit on their checks, and just hang around until they decide to go cash it a couple months later.

So, I started to keep track of my expenses. I got another app for free, that allows you to type in your income and your expenses. This worked really well for me because I don’t have a lot of expenses and I certainly don’t have a lot of income. As I typed in my expenses, my share of the phone bill, and some new ear buds (mine had recently taken an adventure through the washing machine with a pocket of cash I had also neglected to notice), I came to the sad realization that I had a lot less money than I thought.

It’s never fun to keep track of expenses. Who needs to know about your spending habits and Starbucks addictions except for you? Unfortunately, keeping track of your money is essential to being financially smart and secure. If you know how much money is in your account, not by what the bank tells you, but because you’re keeping track of it yourself, you are already setting yourself up to be successful. You’ll feel better about spending when you don’t have to constantly wonder if you can afford it.

** If you’re trying to teach your children financial literacy, check out our posts about college advice, personal finance, and family money goals.

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