money challenge day 1

Feeling Financially Fragmented?  
Take this Week's Money Challenge!
​by Noah Clyman, LCSW-R

The holiday season is a good time to examine your relationship with money. In this blog, I examine why people overspend and help you look at your own spending habits. See if you relate to the following paragraphs:
 
If you’re like most people, you must live within your means in order to accomplish your financial goals. Doing so requires spending less than you earn and then investing your “savings” intelligently (unless you plan on winning the lottery or receiving a large inheritance). Many folks, however, earn just enough to make ends meet. And some can’t even do that; they simply spend more than they make. The results of such spending habits is, of course, an accumulation of debt.

Most of the influences in society encourage you to spend. The temptation to spend money lurks everywhere you turn. Think about it: More often than not, you’re referred to as a consumer in the media. You’re not referred to as a person, a citizen, or a human being. Perhaps you know that you should live within your means; however, you can’t bring yourself to do it. Everyone knows how difficult it is to break habits that you’ve been practicing for many years.

​This holiday season, I observed that many people are spendthrifts who live only for today. A friend of mine recently said, “I’m not into delayed gratification.” “Shop ’till you drop” seems to be the motto of this personality type. “Why save when I might not be here tomorrow?” reasons this type of person. The danger of this approach is that tomorrow may come after all, and most people don’t want to spend their tomorrows working for a living.
Despite relatively high incomes compared with the rest of the world, most Americans have a hard time saving a good percentage of their incomes. Why? Because they spend too much – often far more than necessary.
 
This week I will present you with a Money Challenge. Over the next 6 days, I will email you a daily task. Each task should take about 20-30 minutes to complete. These cognitive and behavioral exercises will help you improve your relationship to money and help you feel more satisfied and in control.

Day 1 Homework: The first step to getting psychologically healthy with your money is to figure out where your income typically gets spent. This week’s task is to write down how much you spent last month. Unless you keep meticulous records that detail every dollar you spend, you won’t have perfect information. Don’t sweat it! A number of sources should enable you to figure out where you’ve been spending your money. To get started, get out your November pay stubs, online banking/bill payment records, and credit card bills. If you took a major vacation or spent a large amount on gifts in November, you may wish you track your spending over the past 3 months to have a more representative sample.

Paper, pencil, and a calculator work just fine for tracking your spending.