Check yourself before you wreck yourself

What is the quickest way to wreck yourself, financially? 
Not paying close enough attention to your expenses.

In our household, Amanda handles the bills, accounting, all the financial stuff.

I’m perfectly capable, but over the years Amanda has taken complete ownership in this weekly task and I have 100% confidence in her ability to handle everything.

I believe this is pretty common with most married couples.  It’s more efficient to have one person have a full view of the incoming and outgoing money to a household to ensure nothing important gets missed. 

I love that Amanda takes on this responsibility. She is naturally more organized than I am and is therefore way more efficient with this task.
But a recent painful lesson reminded me that if we’re not both engaged on some level, then our financial health is far weaker than it should be.

I recently did a financial audit of our businesses, which basically means I analyzed all incoming and outgoing money. I found far too many monthly and yearly subscriptions and charges to things that I kind of knew about, but for the most part didn’t give much thought to because individually, they weren’t that much money.

(Like a half a dozen apps on my phone that charge some sort of monthly or yearly fee I totally forgot I had and something like 20 GoDaddy domains I had bought at different times in the past and that I continue to pay yearly renewal fees for.)

I categorized each expense into one of four categories.

1. Must have.
2. Important, but could investigate other options.
3. Not critical, needs to be replaced or removed.
4. WTF – Remove immediately!

Then I put all of them into a spreadsheet so I could calculate what we would save by eliminating and reducing these expenses.

I was shocked and kind of pissed at myself.
So many stupid things we were wasting money on every month. 

I showed my list to Amanda, who nodded and said, “Yeah, I’m aware of all of those. I code them into Quickbooks every month.”

The problem we had is that we both trusted each other with our roles completely. I trusted Amanda with the accounting and she trusted me with business decisions, as in, if I spent the money on it, I believed it was important or necessary.

The expenses that I categorized as 3s and 4s were likely important or even necessary at one moment in time, but as you know, life isn’t static, things change at home and in business. 

Now that I’ve finally eliminated them, we’ve taken that money we didn’t realize we were wasting and have applied it to debt.

We paid of both of our cars last month. That felt good. 

Now we can further our “Debt Snowball” (Google it if you don’t know what that is).

This was a painful lesson, but at least it forced us to change for the better. 

We now do quarterly audits across our businesses and our household, and twice a month we do a quick meeting to review our account balances, so we’re both on the same page.

That’s it. For the rest of the time, I trust Amanda with her roles, and she trusts me with mine.  We don’t really have to talk about money outside those meetings. 

Going forward, the chances of us wrecking ourselves are vastly reduced.

We do other things that strengthen our financial health, and I’ll share those another day. 

It’s the beginning of a new quarter, so consider doing an audit. Categorize your expenses. See what you can eliminate or reduce. Apply those savings to something fun like an awesome adventure or save it for peace of mind, either way, just don’t put it off.

It’s time.