Melissa Myers, CFP®

(231) 733-1166

Where Do I Start?

| January 28, 2016
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Have you ever asked, "Where do I start?"

When it comes to personal finance the answer is, “Start with figuring out where your money goes.” What are your fixed expenses?  What are your variable expenses?   Are your variable expenses essential or discretionary?  What can you live without and what is non-negotiable?  Why should you start answering these questions?

 You are the biggest factor in your financial success equation.  What you do on a daily, weekly, and monthly basis is more impactful to your personal bottom line than what the economy is doing, decisions made in Congress, or what happens in China or the Middle East. 

Regardless of your age, income, or net worth you can benefit from identifying your expenses.  The process of identifying where you spend your money allows you to identify areas where you can make changes in the future.  

While some may have differing opinions about what is essential and what is discretionary, generally you can think of your essential expenses as those for housing & utilities, food (groceries, not restaurants), transportation, insurance, saving & investing, giving and debt. Anything else is going to fall into the discretionary category.  What changes should you make?  That is a great question and it depends on your goals.

Goals change over time and as they are achieved. A Gen Xer has different goals than a Baby Boomer or Millennial.  Is it important to you to that you have your student loans paid off by 30? Are you saving for a down payment on a home? Would you like to see your family benefit from your financial gifts while you’re alive?  Do you want to leave money to your favorite charity?  Retire at 45?  The process of identifying your expenses is painless and it’s the best first step toward achieving your long term goals.

Identifying your past expenses isn’t creating a budget and it isn’t limiting you. It’s a simple activity where you organize information that shows you how you’ve spent your money.  The more information you have, the better decisions you can make in the future.  

Stay consistent. Like physical exercise produces the best long term results when performed consistently over time, the exercise of tracking expenses will be most beneficial to you when you complete it on a consistent basis over time.  Expenses change from month to month and season to season.  Some expenses may only come up once or twice a year.   Property taxes, insurance and Christmas gifts come to mind as do vacations!  My recommendation is that you start tracking your expenses TODAY.

Getting started is easy. It just takes the commitment to do so.  What did you spend yesterday?  How about during the course of last week?  We tend to lose touch with expenses if they aren’t identified and categorized soon after they are incurred.  So try various tracking methods to see what works best for you.

What tracking method is best? The one that you’ll use!  It is perfectly fine to use a pen, paper, and calculator.  For those who are more technology inclined check out the online banking platform at your bank.  Chances are you have all of your expenses listed in one place and all you may need to do is assign a category to each expense.  Many programs are “smart” and assign a category based on the business at which you made a purchase.  The “smart” trackers will be a time saver, just be sure to review those expenses for accuracy on the category they’ve been assigned.  There are also programs and apps available for tracking your expenses.  A basic spreadsheet works too.

Over time you’ll see trends and intuitively know how much you need to live comfortably. Periodically run a cash flow or category report.  Look for changes and make adjustments.  When in doubt about what to do next or if you are seeking a second opinion, consult with a CFP® professional.

Melissa Myers, CFP®

Melissa is a Gen X business owner and CFP® professional.   She teaches what she has learned on her way to success. She wants to share her secrets to prosperity through financial planning with you. Call or email Melissa at (231) 733-1166 or

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