We must regularly inventory our personal and business expenses to achieve our ideal wealth definition. Without intentionally tracking our incoming income against our outgoing expenses, it is easy to overspend and never see our income increase.
So many of us have subscriptions, bills, and other recurring expenses on auto-pay. In addition, we tend to pay for things with our debit or credit card, which makes it easier to overspend. As convenient as these options are, these practices make it difficult to know how much money goes out monthly. It is incredible how many of us are still paying for subscriptions we never use or are overpaying for service because we didn’t realize the price increased. The only way to catch these things is to take the time to review your actual expenses on a regular basis.
For some of us, an annual review may be enough. For those who subscribe to services regularly or tend to overspend easily, a more frequent review may be necessary, such as monthly, quarterly, or bi-annually. We must determine the frequency best suited to our needs, which may require experimentation.
Action steps:
- Take an inventory of all your expenses.
- Separate personal and business.
- Separate expense by category.
- Identify expenses that are higher than you expected.
- Identify recurring expenses.
- Identify and cancel unused subscriptions.
- Make a plan to reduce expenses that are higher than expected.