I’ve developed a number of good money-related habits over the years. And during this time, I’ve come to realize that some of my best money habits seem to come in pairs. While I didn’t necessarily mean for it to happen this way, it has. And in the process, these pairings have helped me better organize our family’s overall personal financial data.
Tracking not just expenses but income too
As a college student, I was forced to track expenses by my parents, but as an adult, I found this exercise in personal finance very rewarding. Over the years, tracking my expenses have allowed me to gauge things like personal rates of inflation, determine where and how I was spending my money, as well as look for places to cut costs or spend more efficiently. However, as I entered the working world, I realized that this was only half the battle, especially once I became self employed.
Gauging not just expenses, but income too allows me to determine when in the year I break even (income outweighs expenses) or whether or not I’m going to break even, which tells me that I either need to cut costs or increase income. It also helps me gauge from where my income is deriving, in what amounts, and where I should or could better focus my income-earning energies and resources.
Budgeting AND forecasting
In my younger days (i.e. college), I kept a budget. Each month, I would set out a limit for my spending in different categories and then track my costs throughout the month trying to match or beat that budgeted number. However, I eventually realized that just about every month was different in some way. Either there’d be an unexpected expense or an expense like vehicle insurance or holiday shopping that in the back of my mind I knew was coming but for which I still wasn’t fully prepared for. This would in turn throw my monthly budget off, and I would find myself trying to cut costs the following month to compensate.
Therefore, I eventually realized that it was beneficial not just to budget monthly, but to forecast expenses out for the entire year – and eventually multiple years – in an effort to better prepare me for all the costs that I would encounter. This made it much easier to more accurately budget, and over the years this allowed me to refer back to prior budgets in an effort to refine my forecast predictions for upcoming months and years.
Shopping AND selling resale
For years, our family has been good as shopping resale. We’d find bargains at resale shops, consignment stores, antique malls, online, and garage sales. And while we’d save a lot of money buying items through such venues, we eventually realized that we could make some good money through reselling at the same such venues.
With the internet making it easier than ever to find buyers for used items, we’ve turned our passion for shopping resale into a passion for selling resale items as well, improving our financial situation on both sides of the coin.
The author is not a licensed financial professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.