KEEP A MONEY JOURNAL
MONEY IS A major source of stress and anxiety. If it’s not about not having enough, it’s about not knowing what to do with what we do have. It’s about all the emotional hangups and triggers we have when it comes to money, many of which were learned as kids.
According to a 2017 report by the American Psychological Association, 62 percent of respondents noted money as a source of stress.7 Fear of the unknown, or generalized anxiety about whether we’ll have or make enough, can hijack our thoughts and may even block us from making money. Because we’re so fixated on it, we may actually miss opportunities to make sound money choices because we’re distracted by too many negative thoughts or anxieties.
Planning and tracking can help dial down the money drama by arming us with data we can use to make necessary changes to support our goals. I spoke with Ashley Feinstein Gerstley, aka The Fiscal Femme, a money coach and author of The 30-Day Money Cleanse, whose mission is to demystify the world of money and personal finance to help people get a handle on their money struggles so they can enjoy their life fully.
Money—and our messed-up relationship with it—is a major contributor to stress and anxiety, she explains, and we often feel that we’re alone in feeling a lack of abundance and organization in the financial aspect of our health. “In a lot of ways we’re not set up for success. There’s missing education, [and] in our society we don’t talk about money. We deal with it every day but we don’t talk about it openly.”
It’s also an emotionally charged subject, she adds. “We tie up our net worth and our self-worth.” So when you’re not feeling great about money, it can trickle into how you feel about yourself overall. There’s also a lot of shame connected with money, whether that be shame over not having enough, or shame related to having money if you grew up associating money with greed. The latter can make it hard to make or hold on to money because you’re unconsciously blocking yourself, she says.
Feinstein Gerstley often has her clients keep a money journal. “A money journal is where you track what you spend, what the item costs, and your emotions around that transaction. It sounds very simple, but we’re not usually conscious of where our money’s going, and magical things happen when we become aware of that.” Seeing what we’re doing, she says, can help us let go of the negative habits that hold us back. “Everybody gets different insights from it.”
An example she often shares is, “We’ll say we can’t afford a vacation,” and yet when we do the money journal, “we find out we’re spending $1,200 a year on small everyday expenses we don’t even think about or even really enjoy, like tea or coffee.”
How to Keep a Money Journal
You can use a notebook, the Notes section in your phone, an Excel spreadsheet, or an app to track where your money goes. Write down the amount, what you spent the money on, and, after you get good at it, if it’s helpful, the emotions you had before and after the purchase or transaction. Aside from cluing you in to how much you spend in different categories, keeping a money journal can also show you any patterns you may have with emotional spending, or highlight areas where you may need to spend more—or find ways to cut back.
This is especially great if you work for yourself or aspire to leave your current job and start your own business. Take it from someone who once wondered whether I was truly “ready” to strike out on my own. My money journal reassured me that I would, in fact, be able to pay my bills, and that knowledge allowed me to proceed calmly—or at least more calmly than if I’d just jumped in without knowing how big the net was.
You may also want to track what you earn in a separate place. Similarly to how reminding yourself of what is going well in your life can work magic on your mind-set, seeing those numbers rise can help you get into a more abundant and receiving frame of mind.
If this sounds tedious, try it for a month. If you can’t stand the exercise, give yourself permission to give up, but I’m confident that you’ll learn some valuable information about yourself and your money habits. Also, knowing you have to document every purchase can help you be more mindful about what you spend your money on. The big- picture payoff? Fewer money worries waking you up in the middle of the night.
Then What?
Seeing what your spending patterns look like can actually help reduce the drama around money in a big way. Feinstein Gerstley sees this with clients all the time. “Each experience shared with me has brought the individual to the same conclusion: it’s actually less scary when it’s out on paper and you can do something about it.”
The insights you glean from your money journal will enable you to put together a plan for moving forward. Break down your goals to make them more manageable, Feinstein Gerstley says. For example, if your journal reveals that you’re spending a ridiculous amount of money on coffee, your knee-jerk reaction might be to vow that you’ll never spend another dime on coffee again. Instead, try something a little less ambitious, like “Today, I’m not going to buy coffee, and I’ll see how it feels.” You can decide to make your own at home, make do with the office coffee, or skip it altogether.
If you’re working on another goal in your life, such as improving your physical health, it may also be helpful to check in with yourself about what your spending should look like in that area. “I hear a lot, ‘Oh, I want to eat healthy and that’s going to be so expensive.’ It’s an excuse we make—‘Because I’m being healthy, I need this expensive product’—when you might need to look at how much water you’re drinking. Don’t overlook the cheap stuff that’s important for your health!”
“In a lot of ways,” she adds, with nurturing your physical and financial health at the same time, “there’s such a win-win. Often, when I’m doing better in my money life, my health is looking better. A way to look at it would be aligning our values with our spending. We’re being conscious and intentional with the dollars we spend.”