Get out all your bank statements for the last financial year. Enter them all in. This will take a while, so don’t feel you have to do it all at once. I find it handy to say “I will only do 15 minutes of this, then stop” and find I get into the rhythm and keep going for an hour or so.
You’ll start getting rather intrigued with what you’ve spent all your cash on.
Once you’ve entered all this stuff in, print out some of the standard reports, like “General Ledger”, “Profit and Loss” or “Income Statement”, and “Balance Sheet”.
Now take a look at it. Fascinating, innit?
Why is this wise?
No one else cares about your money as much as you do. If someone else does care, it’s because they want to take your money and make it their money.
I could rant for a good while about how important it is that you get a handle on your own personal finances. Seriously. It’s one of those things they don’t force you to learn at school that, unlike trigonometry, is vital for your future well-being. If I were king, I’d ensure that you had to take personal finance, statistics, and critical reading before you were allowed to graduate.
Looking at what you actually do, compared to what you think you do can be confronting, but in a good way. Maybe you’ll stop spending quite so much on comic books and sex toys. Maybe you’ll decide to spend more. Your call. Quality sex toys are an investment, I say.
Added bonus: when you do this, it makes tax time much, much easier. You can often just dump out a report and give that to your accountant, and they’ll do the rest. Ask them for advice on how to set up the software to make their job easier, such as what accounts to use for various expenses.
For more tips on personal finance, a good place to start is Get Rich Slowly.