It's Not How Much You Make, It's How Much You Spend

At Creating the Difference we like educating people. Most of the time, we educate about bowling.  However, we decided to create a blog which focuses on creating a difference in your life -- not just your bowling game.

In this blog I want to talk about money and why you should keep track of it. I recently had a conversation with my Bowling Store team about money. I explained to them that if you can learn to take a big picture approach to spending money, it can really save you money in the long term.

One employee asked to purchase a bowling ball that was just released. He wanted to charge it on his credit card. I asked him the simple question of why he wanted that bowling ball right now. It was because it was new. I said to him That same ball will worth less at some point and strike just as much. Next, we did the math and found if he charged that bowling ball on his card, it would cost him roughly $320 when it was all said and done, because of interest and fees. Yikes! He changed his mind on that purchase.

Now don’t get me wrong, I like when anyone wants to buy a bowling ball.  For someone whose budget is tight and who is working to get out of the cycle of living paycheck to paycheck, it’s important to begin to look at things differently. I decided to spend some time with the entire group to share with them my story and how I look at money.  I went from making 6 figures to $0 and back in less than 2 years. I’m good with the numbers.

The first thing you have to do is know where your money is going. In this case, cash can really hurt you.  It is hard to keep track of cash -- unless you are keeping receipts (that’s a different blog).  So I recommended that my employees download https://www.mint.com/, an online money tracking program designed to help you keep track of your expenses. I have used it for many years. It is easy to set up and once it learns your habits, it is almost automatic in tracking and categorizing your expenses and income. Once you see where your money is going, you can begin to change your mindset on how you spend it.

Here are some of the ways we spend our money without even thinking.  However, if you keep track of this and make a few small changes, you can begin to spend less and improve your quality of life with very little effort.

When I got laid off and went to making $0.00, Mint made me very aware of my spending. So I started cutting spending everywhere.  That nice shiny $60,000 2 door Infiniti sports car I had? Sold it and bought a cheaper 4 door sedan.  That 3500 SQ foot house? Gone and got a much more appropriate house. Why? Because I wanted to survive and not acquire debt to make my situation worse long term. The only way to do that was to cut expenses while I figured out what was next. Using the Mint program I could easily though sometimes painfully, see where I could cut spending and where I couldn’t.