Have you ever looked at the numbers in your bank account at the end of the month and wondered, “Hmm… where’d it all go?”
Then felt guilty because you think you saved enough… but you’re not sure.
This happened to me. All the time…
Despite reading way more personal finance books than could possibly be healthy by the age of 16, and creating a sophisticated, automated system.
The system I used automatically:
- Saved the max contribution in a Roth IRA
- Pulled monies into specific savings accounts
- Paid my bills
- Used email filters to sort through all those bank notifications
I had this great architecture in place… but at the end of the month, I couldn’t tell how much I spent on drinks, or on lunches, or if I even earned more than I spent that month. I sort of presumed I always did, because I’ve been doing this for years, and my net worth moved up and to the right more often than not.
This, I decided wasn’t good enough.
So I decided to make a change. I decided to overhaul my system, and focus less on “automatic” and more on “accountability.”
The Death of Automatic
I loved the idea of “automatic.” I loved the idea of “set it and forget it.” I thought it was the coolest thing.
My friends would be like, “Oh, I gotta go find a stamp to mail in my rent check” and I’d be all like, “You mail in your rent? Psh. I just automated that shit. I set it, and then I forget it.”
Super sexy right? I got a lot of dates with that one.
It’s why I had all the above systems. It’s why I used Mint.
But with automation, how well did I understand where my money actually went? With Mint, technically I tracked every cent, but what did I learn from this?
I could pull up fancy charts and bar graphs, but did any of it have any context?
Nope — it just looked awesome.
Tracking is useless unless its actionable. Meaning, you can look at data gathered and make adjustments. For me, the information gathered by Mint was not actionable: partly because of shared expenses that I didn’t properly split off, partly because the “search” function sucks.
(The same is true for information backups and stored information: the former is useless without ease of restoration, the latter, ease of retrieval. It’s what you do with data that makes it valuable, not the data itself.)
My Process For Manually Tracking Earnings and Expenses
I decided to manually track all my expenses again.
I use an Google Speadsheet. It’s not perfect. I still tweak it every month – but it’s a lot more sophisticated now than 5 months ago, when I started.
In conjunction with Mint, I review my expenses and earnings once a week to account and categorize for my expenses.
Fixed expenses still get plugged in automatically, and unless I intercede, the bills get paid automatically.
By month’s end, all my spending / earning is accounted for. I see in what areas I met my budget, where I should tweak my expectation, and if I should move more money into my savings accounts.
I can’t create a beautiful pie chart (not automatically, anyway).
I can take action, though.
Should I Share This On Fighting Broke?
Shit — this was a scary decision.
Not because I didn’t think it’d be helpful. On the contrary, I think it’d be amazingly helpful to this audience.
Seriously: where else can you find data (I mean, any data at all) on how much a Hollywood Assistant spends on drinks, on lunches? Where can you find information about the spending habits of someone who makes an assistant salary, yet still manages to contribute to their Roth IRA and savings accounts (while others, with the same salary, have no clue where their money went at the end of the month?) Where is there real data on fixed costs of living in Los Angeles, accessible to anyone who’s living in LA and wants to save more, or anyone who wants to move here?
I think this information would be pretty goddamn useful.
Then, why am I so terrified of posting it?
There’s A Reason It’s Called “Personal” Finance
Money: how much we earn and how much we spend, is this hugely personal thing. It’s crazy personal for 99 percent of everyone I know.
Think about it: imagine asking one of your best friends (I mean, someone you’ve known for most of your life) their yearly salary. Imagine how that conversation would go?
Maybe they’d tell you… but that wasn’t comfortable, was it?
I know an executive who literally freaked the fuck out on his assistant because the assistant left his paycheck envelope sitting face up on his desk. Not that his wages were exposed, or was the envelope opened. But because if someone was curious (and nosy and a douchebag and ballsy as hell) they could open it up and see how much he made.
Money is used to build lives, homes, careers. It’s used to shape dreams and make the world a better place.
Money is also used to manipulate. To get people to stay in jobs they hate, unhealthy relationships and to make poor long term decisions.
Money is loaded with emotion and sentiment, so much so that it’s difficult for even two people who’ve sworn a lifelong partnership with one another, to discuss.
This idea, to put my monthly financial tracking up on this blog, is putting my money where my mouth is.
If you want to know what truly frightened me about this experiment, though, it’s this:
There’d Be No More Hiding Behind Perception
My career is in entertainment and in Hollywood. Those with any sort of success display a perception of control: over their personal lives, over their careers, and yes, over their finances.
To put my monthly tracking out there is to pull back the curtain on perception. It’s like revealing the soundstage of a multi-camera comedy: the stage is tiny, the laughter forced, and no one’s as beautiful as they appear on screen.
This is really scary.
It’s frightening to open myself up and say, “this is who I am. This is what I value. This is where I spend my money.” Especially when it may run counter to the perception of Hollywood.
I’ve realized this, though:
This is who I am.
No matter how hard I try, I can’t be anyone else.
When you follow the money, you’ll see what I value. That I care a whole lot about investing in my future and in my family. I don’t care much for shopping, or spending money on a set of 4-wheels and metal frame that depreciates on a daily basis.
Being myself, this openly, is difficult, but it’s all I got.
Transparency takes work. Six months ago, this would have been much harder for me to do.
It’s easier to hide behind our Facebook photos and our reality television and the “brand” we project, rather than be our imperfect, contradictory selves.
To that effect: some of what I share may seem contradictory. It probably is. I haven’t figured it all out. This is what I know right now. We’re all constantly learning here.
Starting next week…
Every Month I’ll Share My Monthly Expenses Tracking
Do you think this would be helpful, to HW Assistants or for future LA transplants?
Is being more transparent about your earnings and spendings something you could do?
Please let me know in the comments. Or, follow along by subscribing by email at the top of the sidebar. Thanks!