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Do you know exactly how much you earned last month – or at least how much you billed, assuming you either work only as a freelancer or if you’re full time employed with a side hustle income?


Do you know exactly how much you spent on coffees out? Do you know how much electricity you used? How much gas? How much you spent on trains? Taxis? Do you know how much you just tapped your bank card for at the Starbucks this afternoon?


That last question – think about it. How many times have you purchased something in a grocery store, coffee shop, or pharmacy, for example, and a few minutes later thought, I don’t actually know how much I just spent. Like, no idea.


This seems a bit crazy that you wouldn’t know exactly what was coming in and what was leaving your accounts, but so many of us don’t. Before I embarked on doing three month analyses regularly, I had a slight, vague idea of how much was going to petrol for the car, and how much electricity and gas may cost, depending on which season of the year it was. And I had an ideal budget in my mind of how much I could spend each month on food, transport, Netflix, internet, phone, charity contributions, etc. But after I decided to do the first 3 month analysis I was shocked. Really shocked!


How was I spending more than I was earning? How was I spending more than what I had budgeted (generously) for food each month? What about all those things that I hadn’t even budgeted for?? Oh crap.


The 3 month analysis was a big help the first time I did it. After seeing the results laid bare like that, and feeling so mortified at not even realizing how much was REALLY going out to each category each month, I decided to do a 6 month analysis to get an even fuller picture (and was still mortified!)


You can read more about the 3 month analysis and realistic budget here.


The sooner you do these analyses for yourself, the sooner you can start to rectify your spending mistakes and start really keeping a track of where your hard-earned cash is going.


The key here is to note everything that is leaving your account. And I mean EVERYTHING, including that £1.39 you paid to park for 30 minutes at the library (some parking lots are stupid expensive!)


And don’t forget about the cash you parted with for that “cheap” item at the market. It was still money you let go of. Add it to the analysis!


It all adds up and those pounds or dollars here and there become £20 or $20 here and there in reality. There are so many ways, like using a tracker app or keeping a small notebook and pen in your bag, to log each and every amount you spend – but I understand if you find this tedious. I certainly do but forming the habit of tracking is what can save you money because you will become way more mindful of what you pay out.


Some of the tracking apps will also either automatically categorise your spending or you can categorise the entry as you are inputting it so instead of manually analysing the entries in your notebook, it’s done for you. Some of us prefer good old paper and pen though 🙂


I have tried many apps over the years and never found myself able to stick to any of them and keep them updated because so often you are on the go, rushing around, buying something, tapping your card to pay via contactless and then rushing for a train or be somewhere and you’re already late (I’m pretty sure I’m not the only one that’s chronically late…)


So, the other option, which I personally prefer to using an app, is the notebook or specially-made budgeting book separated into months, columns and all the rest. You keep any receipts in your wallet, and at the end of the day or whenever you get home, you sit down with your notebook and all the receipts to fill them in. You can categorise them easily enough doing it this way and it may suit some of you who don’t like apps (or think that apps are not entirely safe!)


Again, this is every single day though, and for those who are time-poor (or lack the complete motivation to better their finances and willing to do anything it takes), it means you must set aside a time every day or evening to sit and write in your expenses. You could also do this method on a spreadsheet if preferred.



But the way I like to do it, is once every 3 months, analyzing my spending. Since I use mostly cards, it is much quicker and easier for me to print out bank statements for the past 3 months and do the analysis pen in hand. Here I explain my 3 month analysis and setting a realistic budget in which I use the trusty pen and paper to see things clearly. I’ve also created some templates to help you along the analysis process – feel free to download them (you’ll see how to get them in the realistic budget post).


At the end of the day, you need to see exactly what is going out against what is coming in. I have met so many people that think they are doing fine financially, or at least believe they are keeping their head above water, only to complete the 3 month analysis and realize it is so much worse than they imagined and understand why they are in debt!


If you’re interested in setting a realistic budget, read my post setting out exactly how to create one…


Set a realistic budget - Steps to create your perfect budget - Financial Freedom


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