How to Control Spending in Five Minutes a Month

by Neal Frankle, CFP ®

You may think it’s impossible, but I’m here to tell you that you can control spending easily. The first step to doing that is to know what you spend. Make sense? Now, if you are sick and tired of hearing me suggest that you use software like You Need A Budget to track your spending, you have an alternative. You can get the big picture on spending in under five minutes a month. Oh…and that includes spending three minutes making yourself a nice cup of coffee.

You see, all the information you need is sent to you each month by your bank. That’s right. If you look on your bank statement, it tells you exactly how much you spent. Let’s take a look at an example.

You can see below that this person’s bank statement – like yours – shows the total withdrawals for the month. That, my friend, is how much money you spent. It’s pretty simple and elegant if you consider it. All of your ATM withdrawals are reflected on the statement. Every time you pay a bill (even your credit card bills), the money comes out of your checking account. It’s all right there. Right under your nose.

control spending

Now, in order to get a clear picture of your spending, go back over the last 12 or 24 months of bank statements. Create a spreadsheet showing the month in Column A and the total withdrawals for that month in Column B. Then, add up the total and divide by the number of months you’re looking at. That tells you what you spent on average, per month over that time period.

The beauty of this system is that it’s easy and simple and makes it impossible to lie to yourself. I love it. There is no arguing with the bottom line number. That’s what you spend. Period. Of course, if you have a number of checking accounts and move money around from one to another during the month, it makes this system less reliable. And by the way, my experience tells me that the more checking accounts you have, the less control you have, so do your best to consolidate them.

Having this number is extremely powerful. I’ve seen it work miracles with people who swore they didn’t know how to stop spending money. It works because people have the average in the backs of their minds. Before they whip out the credit card or write a check, they realize it’s going to make that number go up, and they don’t like it.

Do you use a system like this? Why or why not?



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{ 2 comments… read them below or add one }

Ronald Dodge December 3, 2011 at 2:56 PM

I use a cash flow management worksheet for the cash aspect of it. I also use a worksheet that tracts countable savings, networth values, asset values and debt values that’s summarized on a monthly basis.

I don’t like the current picture, but then I’m also dealing with a situation that should only be temporary, not permanent.


JG Larvan November 27, 2011 at 10:21 PM

I think the best way to control spending is to know which are the necessities and which are luxuries. And from your bank statements, you can see where your money is going and where you can adjust your expenses to save some extra money.


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