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Why Tracking Your Money and Budgeting Won’t Get You to Your Financial Goals

You know that feeling when you think you’re doing everything right with your finances, but you’re still not accomplishing your goals?

And you wonder what gives? What is the problem here?

Why is this not working and getting me where I want to go with my money??? 😱

May P. knows exactly how that feels, because she’s just been through that experience.

“I used to think that I’m really good with money, I’m awesome with money,” she said.

There isn’t as much money coming in as she’d like, but what does land in her account gets treated carefully.

Every dollar is tracked – and I meanΒ every dollar.

Here’s how May described herself to me:

I’m a budgeting nerd. It works for me. In two years I’ve gone from being in [five figures] of leftover debt from my 20s and a net worth of [four figures], to being debt free and a net worth of [several tens of thousands of dollars]. All on the same work contract that pays me [not a lot] annually, as a single mom in a very expensive city.

That’s super impressive! πŸŽ‰

The challenge, though, is that despite tracking her money and budgeting closely, May isn’t hitting her financial goals.

In her words, she wants to prosper, but she doesn’t know how.

Last month, we held the first meeting of the current season of my Women’s Financial Freedom Group, of which May is now a member. That’s when she had a major insight.

In today’s story, I want to share that insight and why it’s so important.

It goes to the heart of what it really takes to achieve your financial goals.

Your Levelling Up Plan

The focus of the meeting was to help my members create a plan to level up their finances.

Here are the 5 Level Up Plan Components that we discussed:

  1. Your Dream and Your Goals
  2. Your Growth Team
  3. Your Systems
  4. Your Mindset
  5. Your Habits

After we worked through the pieces of the levelling up puzzle, I asked my members for their insights.

Here’s what May wrote in the chat box:

“One insight: I am way less prepared than I thought I was.”

Isn’t that interesting?

I wanted to tuck into that, so I invited her to unmute herself to do a bit of Q&A on the spot.

Here’s our exchange:

May: When I did your Masterclass, and in the thousands of emails that I sent you afterwards, I came to realize that I really don’t know all that much. In all the budgeting that I did starting from when I was a teenager, I was really just glorifying tracking.

Tracking is not managing your money. Tracking is nice because you can see where your money goes, and that’s great.

I know where my money goes. I could tell you my budget off the top of my head, but that hasn’t helped me grow. It has helped me do consistently OK, but I want to be more than OK.

My current system will keep me at OK. It won’t get me to where I want to be.

Doris: That’s such an important insight. Good for you! That’s absolutely right. Tracking and budgeting, in and of themselves, aren’t enough.

But, and this is essential, you haven’t done anything wrong. Your comment makes it sound like you feel you’ve done something terribly wrong. In fact, you’ve done something right by tracking your spending! Here’s how to reframe that: “I’m awesome at tracking, and now I need more.”

It’s the necessary set of next steps that will get you to your financial goals.

Tracking, though, is an essential component, kind of like oxygen. You won’t get far without oxygen, but in and of itself, it’s not enough to thrive.

Beyond tracking and budgeting

There’s no arguing with the fact that tracking your money matters. Without that information, how can you make informed financial decisions? πŸ€”

❓ Should you replace your car? It’s getting long in the tooth and you wonder about when is the right time.

❓ And speaking of old, you could use a new computer to make your work a lot faster and easier. Does this purchase make sense?

❓ What about paying off your credit card debt. That Mastercard balance is driving you nuts. Is now a good time to crank up the monthly payments?

❓ Junior wants to play hockey this winter; she’s been nagging you about this for a while now, but she’s already doing a couple of other sports. Is paying hockey worth it on top of everything else?

There is no shortage of decisions to be made about where to use your dollars. In the absence of information about how and where you money is currently being used, you’re budgeting blind. That never ends well.

So tracking and budgeting are great.

But they’re not sufficient.

And what about aaaaaaaaaaall those moments where you feel like you’re hitting a brick wall or a glass ceiling? 😟

You spin your wheels, make no progress, feel discourage, doubt yourself, wonder if you have what it takes, or wallow in blame and shame.

You know,Β those kinds of days where life feels awful and hard.

That’s when your support team and your habits kick in to pull you out of the slump, past doubt, and back into taking one step at a time toward that awesome life you want to create.

A budget won’t give you a hug when you need it or help you to understand that you are worthy of your goals.

✨ Your growth team will buoy you through the dark bits and your healthy mindset practice will help you call out old stories that aren’t serving you.

A budget also won’t help you park your backside on a chair to review your investments when it’s beautiful outside and you’d much rather be there, or frankly doing anything else but looking at your investments.

✨ Your habits will help you do that, though, because you will have built a practice of showing up for yourself as promised, whether you feel like it or not.

It’s just not negotiable.

With a healthy mindset and powerful habits in place, doing the hard work is part of who you are and how you define yourself.

This is what May discovered.

To thrive financially, you need goals, a support team, effective systems, a healthy relationship with money, and habits that will keep you progressing.

Level Up Plan Checklist

Here’s a quick checklist of the key components of your Financial Level Up Plan.

I have:

written goals

reverse-engineered my goals into big picture, mid-level, and low-level goals

broken down the low-level goals into actionable small steps that I’m working on at the moment, one at a time.

a growth team in place: cheerleaders, supporters, and challengers

identified my core values and I’m using them as a framework to make financial choices

financial systems in place to make the best use of my money and to free up my time

identified the parts of my relationship with money that I need to heal and I have a daily practice to address that

a list of habits that I’m working on and tracking to help me move up to the next financial level for me

If you’re missing any one of the above, then that’s a great place to start to make some progress today.

Identify your first step.

Maybe you write down one of your financial goals. That’s a win!

If you already have goals, then perhaps you break them down into a concrete step you can take today to move forward. Also a win!

Do ONE thing – that’s all you have to do to get moving in the right direction.

And if you’re not tracking your money? That’s a perfect place to start. πŸ˜‰

It may seem like a lot, but once you roll up your sleeves and get going, you’ll see and feel the progress.

Your goals will feelΒ doable.

And that, my friend, is the best feeling of all.

Β 

What We’ve Learned

  • Tracking your money and budgeting are excellent practices, but they’re not enough to help you thrive financially
  • You need to know where you’re going and what you want to accomplish – i.e. your goals
  • Goals are great, but they can be daunting unless you break them down.
  • Work your way backwards from the big goals to come up with small steps you take immediately.
  • Creating a healthy money mindset, putting a growth team in place, and creating good habits are integral to your success
  • Use the quickie checklist above to cover off the main areas
  • Your financial goals are absolutely doable
  • Focus on progress, not perfection
  • Aim to do one thing; take one small step today and call it a win

Much love,

Doris ❀️

PS I can’t wait to see what K.P. accomplishes in the coming year! I’m excited for her. If you want to send her some love and encouragement, drop a note in the comments below. This is the best part of our community – the support and the encouragement. πŸ™Œ

Photo by RODNAE Productions

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