Journaling is dismissed by many people as an activity left to depressed writers, people with lots of free time or teenage girls. So, what is financial journaling and why should anyone do it? One can take up financial journaling to manage different situations. It may be to control your spending while on a trip with your family or a stressful time in your life financially. Whatever the reason, the desired outcome is the same – to be more mindful when it comes to your money. This simply means you need to be self-aware about why and how you use your resources.
Why a financial journal?
A financial journal is a diary where all financial data is kept. This form of self-reflection doesn’t need to be complicated. You don’t even have to write it down if you are good at practicing mindful earning and spending. But if this is your first time to try bringing some focus to the money you earn, an electronic or a physical journal can make a great difference.
For a start, journaling will work well if done in a notebook you can carry all the time and take notes. In case any part of the journaling involves the collection of data, transferring the data to a spreadsheet can give you the added advantage of using analytical tools. The simple act of noting down each dollar you spend or earn has the power to change your spending habits. Sometimes the simplest things can help us stay motivated and get our finances to the place we want. Here are some ways a journal contributes to getting your finances in order:
Focus on goals
The most vital aspect of journaling is you get a chance to create your own list of goals. These are your financial goals. The best place to write them is on the front page of the journal. This acts as a reminder each time you open your journal. You should sort them and concentrate on the most important ones. The focus will offer you an excellent chance to evaluate your finances and see if there is a way you can improve. This keeps you financially accountable.
Make a money tasks list
How can you get your finances in order if you don’t have a financial task section? A task section should have a list of all the tasks you have to accomplish in a day, a week or a month. Organizing it like a calendar will make your task list more user-friendly. You can set up your short term tasks as a to-do list. The long-term tasks like renewing your contracts or making your insurance payments should be created too. An electrical calendar works perfectly for some people, but I would recommend you write everything down. This helps you remember.
Gives you a chance to reflect on the finances
Just like any other journal, your financial journal should have a section where you can think about your financial actions. Make use of this area to find out if you have been working towards your goals. Take time to analyze all the financial decisions you have made and the results you got. Did everything turn out as expected? Should you change how you make your decisions? Here you get to face your financial realities and make the necessary adjustments. Come up with new ways of remaining financially smart after examining your mistakes. Self- reflection assists you to become a better financial person.
Create a record of your daily accomplishments
Every day you get to succeed in your plans or face new challenges. But to get to your financial goals you need to come up with ways to save and earn money. You can use your journal to record everything you did to save money and the amount you managed to save. It should include things like not eating out, walking to work or skipping a snack you always buy even when not hungry. The only way you can know you don’t spend money wisely is when you create a record of such habits. Just ensure the activities you write out are things you strive to do and not something you must do. Then, come up with ways of avoiding those temptations.
To earn more, you can choose to utilize your free time by taking part in activities that help you get extra money. All efforts you make to earn those dollars need to be recorded. For example, you can run errands like making payments, dropping goods or shopping for others and make money. The extra cash must be the income you get from other sources and not your ordinary income. This helps you find more ways to make money during your free time hence moving a step closer to the goals you have set.
It is a great gift to others
Your journal may not be a big deal to you at the beginning, but it has the potential to become a valuable resource. You will learn a lot from your triumphs and mistakes, and so can your friends, spouse, and children. You can even share the information with people you don’t know (maybe through a presentation). That’s why you see people using personal financial blogs as journals to share their money experiences with wealth creation and debt reduction. People get to comment on your journal, and some of them can even help you figure out solutions to some of the problems you may be facing.
The form you use to keep a journal doesn’t matter as long as you are comfortable with it. You can use a notebook, bound journal, an application or create a blog. But you must keep the journal in a form that can be accessed each time you need it. You are also not limited to using a single option. For instance, you can have a notebook for recording all you do during the day and then later transfer the details into a permanent journal. No matter how you accomplish this, having a journal will boost your ability to take control of your financial situation. You can get started now because all you need to do is get a good journal, invest your time in it and ditch perfection.