The easiest way to audit your spending is by writing down everything that you think that you spend, either on paper or in a spreadsheet of some kind (for easier totalling). Take some time and try to think of everything, phone bills, water, car payments etc. After you’ve taken some time to really think through what you think you spend each month, open your banking apps and look through recent transactions. Everytime you see a payment to a credit card, or service like Paypal or Venmo, make sure to open those too. Try to categorize everything from just the previous month to see what you’ve actually spent.

Doing this does a few things.

1.) What was forgettable?

It doesn’t quite matter if you originally forgot your heating bill, but were there any subscriptions that you forgot to include? After we see the expense we can fall back into ‘oh of course, how could I forget my subscription to Costco, I went there 3 years ago and I still plan to go back!’ I want you to write down everything, mainly the subscriptions, but if you have reoccurring purchases that fell into this ‘forgettable’ category write them down too. These are areas of opportunity where you can find room in your budget, often without really even noticing it.

2.) I’m paying HOW MUCH?!?!

Sometimes, even with things that we still use, our intro rate could have expired without us noticing. Call, find a cheaper plan or alternative service, or reevaluate if the subscriptions is really worth the increased rate. If not, cancel it.

3.) I am become spend, destroyer of wealth.

The reality kicks in. How much you truly spend. Not what you want to spend, not what you plan to spend, but what you actually do. This can come as a reality check for those that never took a hard look before. Sometimes, seeing the spending can also be a ray of hope for those that thought saving was impossible. Seeing that there is something that can be cut, and that money can be used in better ways.

We all have those miscellaneous expenses that we are tempted not to include, fear not, we have a solution. Take the past 3 months. Include everything and average it out. If those miscellaneous expenses are really that irregular, their impact will be reduced. However, in the likely case that those miscellaneous expenses are replaced by just different miscellaneous expenses, we will be able to shed light on that.

I hope you found this exercise helpful. It’s something that I do still to this day, at least once per quarter. I recommend those that are trying to get out of debt or very early in their saving / investing journey do this monthly until you get a really good grasp on everything that is going out.