Money Matters

#MoneyMasterClass Recap–Week 32

This week starts a new month, which means new topics! This week was about reflecting on where we’ve been this year, updating our net worth statement, and doing a 6-month spending analysis.

Reflecting

Gail started this month by having us reflect on the journey we’ve taken so far this year. It seems ages ago, but back in January we had written out our Core Values and also listed our goals in a prioritized list.

It was interesting to revisit the goals list (something I had actually forgotten about!) and see what I accomplished so far. Looking at the list I realized my priorities shifted for some of my goals. Some of my “must do” goals have become “want to do’s” and moved further down the list. Some changes in priority have come due to the pandemic and accessibility, such as finding a volunteer position, and others simply because of a change in mindset.

I’m grateful that I’ve still been working through this year, so my spending and earning has been essentially the same for 2020 as any other year. For the tools that Gail’s been introducing this year, I am a HUGE advocate for the spending journal.

I’ve written down every purchase I’ve made since 2012. I have a new section in my notebook for each month and tally up each section every few days. I use it to keep track of how much money I have left in each section of my monthly budget for my main categories of spending.

It’s been a tool that’s allowed me to stay on budget and gives me the accountability I need if I make a larger purchase or “splurge” on something. I believe it’s okay to spend a little frivolously now and then, as long as there is that accountability and I stay on budget.

Net Worth

I’ve spent a lot of time over these last couple of weeks reorganizing my savings and opening up some higher interest savings accounts. It was really encouraging to do an updated Net Worth Statement to see the progress I’ve made so far this year. Whether it’s your first one or an updated one, I highly recommend making one of these statements to get a concrete picture of your finances.

You can find the Net Worth Statement worksheet and instructions here:
https://www.hoyes.com/money-master-class/

The Ebbs and Flows of Life

These tweets weren’t specifically tagged with #MoneyMasterClass, but I love a little bit of Gail Vaz-Oxlade wisdom, so am including them here too.

Spending Analysis – How to Start

The big task for this week was creating a spending analysis. I’m going to do another plug for having a spending journal here before digging in. The spending analysis was so easy to do with my spending journal because I already had every transaction written down and separated by month and category. All I had to do was plug the numbers into the spreadsheet (found here) and look at the results.

If you don’t yet have a spending journal, here are the steps Gail’s laid out:

1. Gather 6 months of all your statements (pre-covid is probably most helpful)
2. Separate the statements by month
3. Number all statements in your first month #1, second month #2, etc

Spending Analysis – The Why

Spending Analysis – Entering the Numbers

Now you take each pile of statements and enter the details into the spending analysis worksheet. The worksheet has a LOT of categories and you can edit those as you need to. I changed the name of some categories to make them more applicable for my spending.

If your statements are not detailed, make the best choice you can with the information you have. The idea is to give a picture of where your money goes to. I realized when looking at my spending journal I don’t have the exact type of spending broken down. For example, I lump in personal care items with groceries as I buy them at the same store. Going forward, I’m going to be a bit more detailed to get a more realistic picture of my spending.

Preparing for the Rain

Gail closed out the week with a reminder why it’s so important to be learning these tools. She is really giving us the ability to weather the storms that come our way.

Have you done your spending analysis and updated your net worth statement? What did you learn from them?

New to the Money Master Class? There’s still time to get started!
Check out this Twitter Archive to see all of Gail Vaz-Oxlade’s #MoneyMasterClass tweets from the start.
Find the resources, spreadsheets, and quizzes here: Money Master Class
Check out my weekly recaps to get caught up.
Start here with the Money Master Class Intro and Week One Recap

Check out Gail Vaz Oxlade’s books here:*

Money Rules
Debt Free Forever
CEO of Everything
Money Smart Kids

*This is an affiliate link. As an Amazon Associate I earn from qualifying purchases however I only recommend products that I have purchased and use myself! Clicking an affiliate link does not cost you anything, but allows us to earn a small commission.

14 Comments

    • A Sustainably Simple Life

      It might be worth a try to do some analysis! 🙂 I learned a number of things from the spending analysis even though I thought I knew where all my pennies were going.

  • Ming Qian

    I have no idea what I was expecting when I clicked on this blog post, but wow! I need to admit that I am terrible at managing my finances. I do not scrutinize my monthly statements, and neither do I keep track of my spending. if you asked me how much I spent last month, I won’t be able to tell you. I probably should devote some time each month to doing that though. Thanks for sharing! 🙂

    • A Sustainably Simple Life

      The money problems site I link to in the blog has some great resources to start looking at finances. I’m a bit of a budget nerd so love tracking spending and the like. I find it empowering to know where the money goes 🙂

  • Charity

    This is such a great and informative post! We try to stay on top of our money management too, but I’m always willing to learn more on how to make it easier and simpler for us. Thanks for sharing!

    • A Sustainably Simple Life

      I feel like I’m continuously learning more and more about finances. There’s so much to learn! 🙂

  • Paige

    I used to be good with my finances; but since lockdown started it hasn’t been good at all. I need to sit down and have a strict talk with myself and get everything sorted – especially before heading back to university. I think it is so easy to slip into bad habits when stuck at home or out of the normal routine.

    Paige

    • A Sustainably Simple Life

      I’ve felt a similar way through lockdown. I have a ton of time, but haven’t been doing as much as I could with it. Getting things sorted before heading back to university sounds like a great plan. 🙂

  • brittshedhappens

    I fully agree with your approach to budgeting/spending. We also subscribe to the idea that it’s okay to splurge from time to time as long as it fits into the budget. Recently, I’ve been picking up some extra work on the side. We decided that they best way to deal with that random income was to take a 50/50 approach – 50% goes into savings and 50% can be spent on things that we ‘want’ but don’t necessarily need. For example, we recently picked up some new camping equipment that we could have gone without, but it’s a nice luxury for all our trips. This is income that isn’t in the budget, so we’re still coming out WAY ahead with 50% going into savings while also having a little fun with the other half (without killing the budget in any way).

    • A Sustainably Simple Life

      That’s a great approach to the extra income! I find having a budget gives me guilt-free freedom to make those splurges and have fun because I can be confident that I’m not hurting myself financially. I love hearing when others have a similar experience. Thank you for sharing! 🙂

What are your thoughts? Let us know in the comments!

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