During the early months following the 2008 stock market crash, talk shows were full of all kinds of conversations about how to cope with the crisis if you’d lost your job, had to foreclose on your house, found yourself unable to pay your credit card balances, etc. That was the first time I heard the phrase “spending unconsciously.” Jean Chatzky, the financial editor on the Today Show, was discussing how shocked she was that so many people, for so long, had been spending unconsciously.
That comment really stuck with me when I first heard it and continues to stick with me to this day. At the time, I thought to myself “Well no kidding! We’re killing ourselves working full time, commuting 90 minutes each day, raising three kids with all their demands, and taking care of a house. Now you come on TV and tell us that we’re not doing enough? We have to perfectly track our daily expenses—from a $1.49 donut to a $97 family meal—do you realize how many times a day I open my wallet for this little snack or that little school activity fee?! Now, I’m supposed to write each one of these things down every day? Right! I’ll get on that just before my luxuriously drawn bath and after my pedicure.”
Even though I was annoyed by Ms. Chatzky’s comment, I knew it was true. I knew that we (I’m throwing my husband under the bus with me) were spending unconsciously. I knew that all of those small expenditures added up, but we were too busy with everything else to do anything about it.
But I suppose the most important thing it did was get me thinking—start making me more conscious of our spending. I’m not saying we changed right away, because we didn’t, and to this day, there are areas of our spending that we could improve (like eating out). But we started paying attention. I started to pack 15-cent grocery store water bottles to take to the ballpark rather than buying the $2-bottles sold at the concession stand. I started looking at how much food cost at the grocery store and paying attending to which brand was a better deal. Yes, I admit it, before that, I couldn’t tell you how much milk or butter or cereal cost. I couldn’t tell you that a half-gallon of chocolate milk was double the price of white milk. I couldn’t tell you the per-pound price of chicken breast.
When I was growing up in Ohio, the sale price of a loaf of bread at the local Kroger store was a topic of dinner conversation between my neighbors and my parents, but I couldn’t be bothered with such triviality. Who had time to pay attention to that? I knew I needed it so why did it matter how much it cost?
Well, following Ms. Chatzky’s appearance that day, I started to realize that those day-to-day trivialities are the things that allow us to be in control of our financial lives. And I can honestly say that I feel that the rat race has controlled me much of my life and not the other way around as it should be. In her book Peace and Plenty, Sarah Ban Breathnach says “Not counting, especially after you’re conscious, is a sophisticated form of self-sabotage.” So fast forward to the past few years, and we are much more conscious of our spending. We clip coupons and watch for sale prices (although admittedly not as religiously as my childhood neighbors), buy used furniture occasionally, cut our own lawn, and clean our own pool. Are we perfect? Not by a long shot. But we pay attention.
- We all should be paying attention to our budget. Do you have one? There are a few ways to track your expenses so you need to find the one that works best for you. Some people use the envelope method—a simple, tangible concept described by Breathnach. Others collect every receipt and organize them by category. And others write down every expense and use that intel to create a spreadsheet that they track every month. Find what works for you. When you’ve done this, you’ll know the expense side of your personal Cash Flow Statement.