One day soon after we began our “getting out of debt” journey I decided, for motivational sake, to go back and track how much we spent on eating out in 2012. It was in December of 2012 that we had our financial wake-up call and realized we had to do something about our money situation. We’d cut down quite a bit on eating out over the last couple of years before that, so I was curious to see what we’d actually spent on restaurants, given we’d tried to make 2012 a little more budget friendly in that area.
Now, I have to start by saying that I had a serious addiction to eating out. I loved taking the kids out, I loved going out with my friends. I still do, to some extent. When you’re the main chef for a household of 6, there’s something very relaxing about sitting down and having someone else cook your meal for once.
But given our financial mess and how it escalated in 2011, I knew that in 2012 we needed to reign in spending a bit more if we were to start learning how to get on top of our mountain of debt.
I sat down that cold December morning, pulled up our checking account e-statements, and wrote down every single restaurant purchase I could find for the year, from the sit down restaurants to the “picking up a kid a hot dog and coke at Target” expenditures. Then I added in $200 cash for stuff I couldn’t track.
The Truth is Tough to Take
I started in December and worked my way backwards. By the time I reached my November statement, panic was starting to set in. By October, I was having trouble breathing. The more I wrote, the more I freaked out.
Dear God, can’t this be over??
No, it can’t. You’re only on September.
By June, the panic had calmed, not because we had spent less, but because the end of the exploration was drawing near. By March, I was almost at peace. I was at peace, you see, because I had accepted the fact that we’d spent our family into a crater and was giving us kudos for at least facing the music and committing to change.
And because I was finally starting to understand how we’d gotten ourselves into the mess we were in. It was all becoming crystal clear. We had literally nickeled and dimed our way into a mountain of debt! No vacations, no fancy clothes or fancy restaurants. No trips to the opera or the theatre. No fine jewelry or furniture.
We had piddled away our money on stupid, useless stuff. In the case of eating out, we had piddled away over $2100 in 2012. Yes, I said Two Thousand One Hundred Dollars.
And that was in the year we’d cut back on eating out.
That doesn’t even cover our astronomic expenditures on groceries, gas, entertainment and other miscellaneous stuff. In each case and for each category I found that we’d spent at least 50% more than we thought we had spent.
Spend Tracking Is Your Friend
Many people poo-poo my suggestion that spend-tracking is vital to financial success – at least for those new to personal finance awareness. Personally, I’d read years ago that one major key to getting control of your money is to track your spending for thirty days to see where your money is going. I’d tried – and failed – at least a half dozen times to track our spending for thirty days.
The problem? I’d get to about day three during the month and fear and panic would overtake me like a boss. I’d feel horribly guilty if I spent one cent that wasn’t a necessity.
The truth was that money scared us. Not having enough scared us. Having too much scared us. Being hungry and homeless scared the crap out of us, and we were convinced that if we made even one money mistake that our lives would fall apart and we’d find ourselves out on the street.
Looking back, we realized that we both grew up in households where fear about money was a major factor. Those messages we received as children made us both terrified to manage money. So we simply spent as we wished and put our heads in the sand about the consequences.
Find out the real reason why you spend more than you make: Money Love: A Guide to Changing the Way That You Think About Money
When we moved from suburbia to a hobby farm in October of 2012, something happened. We were on the outside peering in at this rat race Americans live in. We could see the futile attempts at keeping up with the Joneses for what they were. Suddenly, we became radically aware of the fact that our net worth balance sheet is in our control. Being rich or being poor, it’s not just luck of the draw; it’s about making daily, minute-ly decisions about what to do with the money that comes into your hands.
Recommended Reading: The Difference: How Anyone Can Prosper in Even The Toughest Times
So after looking over our 2012 expenditures in the area of groceries, restaurant expenditures, gasoline expenditures, etc., we found that our spending numbers were MUCH higher than we thought they were.
- Where we thought we were spending $600 a month on groceries, we were actually spending $900 a month on groceries
- Where we thought we were spending $75 a month on eating out, we were actually spending $175 on eating out
On and on the list went. Suddenly, it became crystal clear why we were tens of thousands of dollars in consumer debt.
We started spend-tracking on January 1st, 2013 and haven’t looked back.
Spend tracking allows us to see in real time what we’re spending, and to make adjustments in our spending right at the moment, before things get out of control during the month. The result?
- We now spend $400-$500 a month on groceries for our family of six, effectively cutting our grocery bill in half
- We spend between zero and $100 a month on eating out and entertainment instead of $175 a month, cutting that bill in half
We went over every single bill we had each month and assessed it to see if we could lower or eliminate the bill. We cut our cell phone bill by over half when we switched to Republic Wireless.
Tracking our spending enabled us to find the leaks in our financial ship, which freed up more money for us to throw at our consumer debt every month. We are now well on our way to becoming totally consumer debt free.
If one truly wants to get out of debt, they’ve got to find, and repair, the leaks in their finances. Don’t be afraid. Trust me; I know it’s scary. But think of the success and the freedom you’ll have once you find that leak and plug it up.
If you can face the facts and commit to change – radical change – I guarantee it’ll be worth the trouble.
Have you discovered any leaks in your financial ship? Do you spend-track?